May / June 2014 - USDA Rural Development · Rural Cooperatives / May/June 20145 United Ag Co-op agronomist Lisa Morcom (far left) says that in just four years, United’s cotton agronomy

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lCOOPERATIVESCOOPERATIVESMay / June 2014

Building Success on ServicePage 4

2 May/June 2014 / Rural Cooperatives

By Doug O’Brien Acting Under Secretary USDA Rural Development

The Farm Credit System — a financialcooperative owned by the farmers andranchers who use its services — has longbeen a prime source of financial services thatsupport food and fiber production. It also

often works in tandem with USDA to build a stronger ruralAmerica. In this column, I would like to cite two recentexamples of this cooperation between Farm Credit andUSDA.

One example is Farm Credit’s support for the Obamaadministration’s “Made in Rural America” effort. Thisinitiative is designed to help innovative small businesses,including cooperatives, throughout rural America access thecapital they need to grow and create jobs. The other exampleinvolves Farm Credit System institutions working withUSDA to support expansion of a rural hospital that deliverscritical healthcare services in Minnesota.

Equity investments in rural business“Made in Rural America” is an export and investment

initiative that will help propel the growth of small businessesacross rural America. The new Rural Business InvestmentCompany (RBIC) will now allow USDA to facilitate private-equity investments in agriculture-related businesses andcooperatives. Currently, USDA programs exist to helpprovide loans or loan guarantees to help rural businessesgrow, but many small cutting-edge businesses also needequity support in addition to, or instead of, borrowed funds.

Advantage Capital Partners, which will manage the newfund, and its partners from eight Farm Credit institutionshave pledged to invest nearly $150 million into the neweffort. The Farm Credit System’s nationwide network ofbanks and lending associations is specifically chartered toserve agriculture and the U.S. rural economy.

“One of USDA’s top priorities is to help reenergize therural economy, and we now have a powerful new toolavailable to help achieve that goal,” Agriculture SecretaryTom Vilsack said in announcing the fund. “This newpartnership will allow us to facilitate private investment in

businesses working in bio-manufacturing, advanced energyproduction, local and regional food systems, improvedfarming technologies and other cutting-edge fields.”

The fund is being formed under USDA’s Rural BusinessInvestment Program (RBIP). USDA utilizes RBIP to licensefunds to invest in enterprises that will create growth and jobopportunities in rural areas, with an emphasis on smallerenterprises. Working through the USDA program enableslicensed funds to raise capital from Farm Credit Systembanks and associations.

This new partnership between Farm Credit institutionsand Advantage Capital, a leading growth capital and small-business finance firm, brings together resources and peoplethat are focused on providing more private capital, smallbusiness investment and quality jobs to rural America. Thispublic-private partnership will have a tangible positive impacton our rural economy and is a model of how government canserve as a catalyst for private investment in rural America.

Eight Farm Credit institutions providing initialinvestments in the RBIC fund are: AgStar Financial Services(Mankato, Minn.); AgriBank (St. Paul, Minn.); Capital FarmCredit (Bryan, Texas); CoBank (Denver, Colo.); Farm CreditBank of Texas (Austin, Texas); Farm Credit Services ofAmerica (Omaha, Neb.); Farm Credit Mid-America(Louisville, Ky.); and United Farm Credit Service (Willmar,Minn.).

USDA will be accepting applications for other new RuralBusiness Investment Companies. Interested applicants haveuntil July 29 to submit their applications for review in fiscal2014. Any application accepted after this deadline will beheld for consideration next year. USDA intends to acceptRBIC applications through 2016. Detailed informationincluding application materials and instructions can be foundat: www.rurdev.usda.gov/BCP_RBIP.html.

In addition, the White House Rural Council, as part ofthe Made in Rural America initiative, will convene the RuralOpportunity Investment Conference later this year to attractadditional investments to rural America by connecting majorinvestors with rural business leaders, government officials,economic development experts and other partners. To learnmore about the conference, visit:

Commentary Farm Credit partners with USDA to strengthen rural America

continued on page 44

Features

Rural Cooperatives / May/June 2014 3

Volume 81, Number 3May/June 2014

Rural Cooperatives (1088-8845) ispublished bimonthly by USDA RuralDevelopment, 1400 Independence Ave.SW, Stop 0705, Washington, DC. 20250-0705.

The Secretary of Agriculture hasdetermined that publication of thisperiodical is necessary in the transactionof public business required by law of theDepartment. Periodicals postage paid atWashington, DC. and additional mailingoffices. Copies may be obtained from theSuperintendent of Documents,Government Printing Office, Washington,DC, 20402, at $23 per year. Postmaster:send address change to: RuralCooperatives, USDA/RBS, Stop 3255,Wash., DC 20250-3255.

Mention in Rural Cooperatives ofcompany and brand names does notsignify endorsement over othercompanies’ products and services.

Unless otherwise stated, articles in thispublication are not copyrighted and maybe reprinted freely. Any opinions express-ed are those of the writers, and do notnecessarily reflect those of USDA or itsemployees.

The U.S. Department of Agriculture(USDA) prohibits discrimination in all itsprograms and activities on the basis ofrace, color, national origin, age, disabili-ty, and where applicable, sex, maritalstatus, familial status, parental status,religion, sexual orientation, geneticinformation, political beliefs, reprisal, orbecause all or part of an individual’sincome is derived from any publicassistance program. (Not all prohibitedbases apply to all programs.) Personswith disabilities who require alternativemeans for communication of programinformation (Braille, large print, audiotape,etc.) should contact USDA’s TARGETCenter at (202) 720-2600 (voice and TDD).To file a complaint of discrimination, writeto USDA, Director, Office of Civil Rights,1400 Independence Avenue, S.W.,Washington, D.C. 20250-9410, or call (800)795-3272 (voice), or (202) 720-6382 (TDD).USDA is an equal opportunity providerand employer.

Tom Vilsack, Secretary of Agriculture

Doug O’Brien, Acting Under Secretary,USDA Rural Development

Dan Campbell, Editor

Stephen A. Thompson, Assitant Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?Call (202) 720-6483, or email:[email protected] This publication was printed with vegetable oil-based ink.

p. 4

04 Building Success on Service Expanded agronomy service enhances value of Texas co-op for cotton and grain producersBy Dan Campbell

12 The Right Blend Fifth Season’s vegetable mixes help scale-up Wisconsin farm-to-school marketing programBy: Lihlani Skipper and Alfonso Morales

18 The Long RunNumber of ag co-ops celebrating 100th anniversaries on the rise By E. Eldon Eversull

24 A ‘Human Soul on Fire with Great Cause’William Hirth’s iron-forged will and vision were essential to the formation of MFA By Chuck Lay

30 Remembering the ‘Badlands’ ReportBy Bill Patrie

35 Your Guide to the New Farm Bill

Departments02 COMMENTARY

28 CO-OPS & COMMUNITY

36 NEWSLINE

p. 12

ON THE COVER: “The thing I value most about my membershipin United Ag Cooperative is the knowledge and service the co-opprovides in the areas of marketing, agronomy and the handling ofour crops,” says Texas cotton grower Michael Popp, seen herewith son Hayden. “Because of the co-op and the people whowork there, the farmers and the community benefittremendously.” For more about the members and employees ofUnited Ag, see page 4. USDA photo by Lance Cheung

p. 24


Building Success on Service

Expanded agronomy service enhances value ofTexas co-op for cotton and grain producers

By Dan Campbell, Editor

Looking out over a field of cotton prior toharvest, one can picture those puffy whiteballs being spun into sturdy blue jeans,billowy blouses and soft pillowcases. But

there is nothing soft or easy about growing cotton. Itis, in a word, “temperamental,” according to LisaMorcom, an agronomist with United AgriculturalCooperative Inc., in El Campo, Texas, about 90 mileswest of Houston.

“There are many crops where you plant them, they

Editor’s note: This article is based on interviews conducted by USDA photographerLance Cheung, who also took the photos.


United Ag Co-op agronomist Lisa Morcom(far left) says that in just four years, United’scotton agronomy program has climbed from5,000 to 35,000 acres of cotton enrolled.Welder James McKeon (middle photo) atwork in the co-op’s shop in El Campo. “Ouradvantage is in service,” says ManagerJimmy Roppolo (left), seen in a warehousefilled with bales of cotton. Below: PhilipMerek says a USDA loan program that helpsbeginning farmers enabled him to buy farmequipment, such as this combine, which heneeded to start his own farm. USDA Photosby Lance Cheung


grow happily, you harvest them at theend of season and are done,” Morcomsays. Cotton is not one of those crops.

“Cotton is of a more indeterminatenature; when a cotton plant is born, itwants to grow into a tree,” she says.“My job is to help members managetheir crop – to nurture it, slow it downand speed it up to get the balanceneeded to maximize the yield,” shecontinues. “Cotton always keeps youguessing – no two seasons are everalike. But I love working with cotton.”

Morcom grew up in the farmingtown of Dubbo,Australia, 260 milesnorthwest of Sydney. It was during atrip to her grandmother’s house whenshe was about 12 years old that shedecided on an ag career.

There was an agronomist from Texaswho lived next door to hergrandmother for about six months eachyear while doing cotton consultingwork. “One day, she asked me if Iwanted to go out into the fields withher and catch some bugs.”

Eager for something to do, Morcomagreed to tag along. Turns out she had ablast while sweeping for bugs and doingrelated tests. The inner plant scientistin her had awoken!

“That experience triggered myinterest — from that moment, I knew Iwanted to be an agronomist.” As anagronomist, Morcom says, “you helpfarmers decide what they are going toplant, when they will plant and howthey will plant.”

Morcom earned a BA in agronomyfrom the University of New England inArmidale, Australia. Like her earlymentor, she was soon following an“endless summer” work routine,splitting each year between the cottonfields of Texas and Australia, which haveopposite growing seasons.

Texas callingIt was about five years ago, while

back home working in Australia, thatMorcom got a call from JimmyRoppolo, general manager of UnitedAgricultural Cooperative. He told her

that United Ag wanted to become morethan a source of quality farm suppliesand ginning services for its cottonfarmers, and was thus launching a cropconsulting service and was looking tohire agronomists; he offered her a job.

“Within a month, I had packed upeverything and moved to America.” Shehit the ground running and is nowstarting her fifth growing season withUnited Ag.

The first year, just 5,000 acres ofcotton were signed up for the newagronomy program. “A few farmerstentatively held up their hands andagreed to be the guinea pigs,” Morcomrecalls with a smile. They were gladthey did, because they soon learned thatthe co-op was quite serious abouthaving expert agronomists in the fieldto help them, 24/7.

“By the end of that first season, wehad 20,000 acres signed up for the

following year,” she says. This summer,the co-op will have about 35,000 acressigned up, which will be overseen by astaff of seven agronomists working outof El Campo and two other locations.

In addition to cotton, theagronomists also advise the co-op’sgrain/oilseed farmers, whose primarycrops are corn, milo and soybeans,although wheat acreage is starting toexpand.

“What differentiated our programwas our constant presence in the field— farmers put us on speed dial; theyknew that what they asked us to dowould get done,” Morcom says. Sherecalls getting a call from a farmer whowas having a problem with his crop.After showing her the situation, hesimply told her: “fix it,” and left the restup to her.

“That really hit me — the fact thathe was putting this incredible amount

“Floor manager” is Joe Vasquez’s (left) job title, but “problem solver” would be just as apt a titlefor a man who loves helping customers find parts and solutions for needed repairs. Oppositepage: Manager Jimmy Roppolo (lower right) is nearly lost in the enormity of one of the co-op’sempty grain silos, one of the largest in southeast Texas.


Make hay while the sun shines. Few know the wisdom of thatold farming adage better than do producers in Southeast Texas.Farming relatively close to the Gulf Coast means they are oftensubject to drastic, sudden changes in weather.

“You never know when a hurricane could come your way,packing the power to turn something very pretty into somethingvery ugly in a hurry,” says Josh Marek. Severe storms blowingup from the Gulf can turn a field of grain or cotton into a field ofmud, all in a snap.

Terence Marek, Josh’s uncle, recalls a few years ago havingto salvage what he could of a field of milo while contending withfoot-and-a-half deep mud. “Terrible weather — raining everysingle day,” he says.

When severe weather is approaching, a farmer may only havea few precious hours to finish harvesting a field. That is when itis most crucial that farm equipment be mechanically sound andready to roll.

Most farmers with many years in the business haveexperienced a critical breakdown at the worst possible time. Toreduce the odds of that happening, the Marek family worksclosely with United Agricultural Cooperative.

“I’m really glad we live near a town with a strong ag co-op,”Josh says. “A good co-op can help a farmer in so many ways.”

“We average about 50 inches of rainfall per year, maybe twoor three freezes annually and snow maybe once every five yearsor so,” says Terence. The red silt soil of his land near theColorado River [not the same river that runs through the Grand

Canyon] is “some of the best farmland in Texas,” he says.Wharton County, he adds, is the state’s top corn-producingcounty.

“This area has traditionally been primarily cotton and ricecountry; but now we have corn varieties that can withstand theheat,” says Josh.

The advent of smart phones that enable a farmer to monitorthe approach of a storm front while driving a combine or cottonharvester is also a big help. “Broadband wireless has becomevery important to us,” says Josh, who credits the WhartonCounty Electric Cooperative in El Campo for offering the kind oftelecommunications services he needs.

“It [broadband service] is vital in the field for updates on theweather,” adds Philip Marek, Terence’s son, who operates hisown farm. His smart phone also helps him keep up on commoditymarkets. “This morning, I looked at my phone and could see theprice of corn going down 5 to 10 cents,” Philip says. “So, I calledmy broker and sold 5,000 bushels.”

Philip says United Ag is helping him with the technical supporthe needs to adopt a precision farming strategy. “In the past, wewould plant 25,000 corn seeds per acre across an entire field.Now we apply it based on the yield potential of the area. We dothe same with nitrogen and lime. It’s all about improved efficiency.”

“We have two or three years of yield maps, which we use inplanning application rates,” adds Terence. “The goal is to investmore money for inputs on your best land, with the greatest yieldpotential.”


of trust in me. The decisions we makehave such a huge impact on theirlivelihood. These farmers really are likefamily to us, so we do everything wecan to keep the relationship strong.”

The co-op’s Agronomy Division isalso promoting greater use of precisionagriculture practices to help farmersmore accurately tailor applications offertilizer, crop protectants and seeds to

the actual needs of their soil. By notover-applying expensive crop inputs, itsaves the farmer money and reducesproblems with chemical runoff intostreams or ground water supplies.

“Our job is to help memberssucceed, and this includes putting theright amount of crop inputs on theright acres,” Roppolo says. The co-op isalso heavily involved in pest monitoring

“to help keep disaster away,” he notes.

Manager as talent scoutWhether recruiting a worker from

the opposite side of the world, as wasthe case with Morcom, or just the otherside of the street, Roppolo says UnitedAg Co-op’s success is based on theability to hire the best and brighteststaff members.

Rain or shine, farmers depend on co-op

There are expenses, of course, for new gear needed to getstarted in precision farming. Josh says he started the process sixyears ago with the installation of a yield monitor on his cottonharvester, and has been “slowly moving forward from there.” Hemade his first variable-rate fertilizer application several yearsago.

These are just a few examples of how the co-op helpsproducer-members.

“Our co-op is progressive in everything it does,” Terencesays. “It is putting in a natural gas pump for cars, which will bethe only one between Houston and Corpus Christi. United is aninnovator, not just for farmers with row crops, but for cattleproducers as well.”

Grower field days sponsored by United Ag are another bighelp to members, says Philip. “The research the co-op supportsis geared to address the conditions we grow in here, showing

how we can be moreproductive.”

“When the co-opsponsors an agronomyfield day, it is more abouthelping producers learnthan about selling moreproducts,” adds Josh.He appreciates that theco-op is not bent onpromoting a certainbrand of inputs.

Terence recalls thehard work of “choppingcotton as a kid — Ialways said I’d never be

a cotton farmer when I grew up. So what did I wind up as? Acotton farmer!” he says with a laugh. But farming has been agood life, and he was happy to help Josh and Philip get startedwith their own farms, mostly by sharing his experience andknowledge with them. “I think that is so important for a youngfarmer — to learn from experienced farmers.”

Josh, who grows 700 acres of corn and cotton, agrees withhis uncle, and says that advice has helped him avoid makingmistakes. After seven years running his own farm, he has noregrets. “It is exciting and fun — every day is something new.Ever since I was a kid, I never wanted any other job but this.”

Philip and Josh both say USDA loan programs for beginningfarmers were a big help in starting their own farms.

“USDA’s Beginning Farmer Loan Program helped Josh and meget started,” says Philip. “It is a guaranteed loan program,offered through the USDA Farm Service Agency. We used it tobuy equipment and for the other financing necessary to getstarted. It was crucial because it is hard for guys our age to findthe financing to get started.”

—By Dan Campbell; Interviews conducted by Lance Cheung

“United Ag is an innovator, not just for farmers with row crops, but forcattle producers as well,” says Terrence Merek (left). His nephew, JoshMerek, says “A good co-op can help a farmer in so many ways.”


You can find talent all around. Forexample, Roppolo recalls the time hewas impressed by the superior customerservice of a woman working at his localdry cleaners. She asked him how longhe had been waiting in line, and —feeling that he had been delayed toolong — she insisted that he return tohis truck, then brought his dry cleaningout to him to get him on his way

quicker. He suggested she apply for anopen job at the co-op, which she didand where she has continued to excel.

Other workers come knocking at theco-op. Like welder Juan Arranda, whocame in looking for work, but was toldthere were no jobs at that time. Henonetheless insisted on hanging aroundthe shop, offering his help for nearlytwo weeks without pay. Roppolo

couldn’t let that kind of determinationand work ethic slip through his fingers,so he told one of his managers to “puthim on the payroll. He’s been one ofour best workers ever since.”

Then there’s Joe Vasquez, a floormanager in the large hardware/farmsupply store in El Campo. He had beenworking on a ranch, where, Ropollo wastold, “Joe tended to start a job like a hot


spur, but would then fizzle out.” Roppolo, however, got the

impression that “maybe Joe wasn’tbeing treated right. So I told one of ourmanagers to give him a try and to makesure we treated him with the respect wegive to all of our employees.” Thisstrategy worked.

“Joe is one of our best and mostoutgoing employees. He searches forthings he can do and does them right. Ilike to think that this co-op helpsworkers develop hidden skills. Themost important factor is that they havethe right attitude toward work.”

“I have learned so much on this job,”Vasquez says. He sees his most valuabletrait as “being a problem solver forcustomers.” One minute he will behelping a customer find the correctfittings for a plumbing job, and then heis off locating a hydraulic hose or a ballbearing needed for a farm machine repair.

“I was born and raised in El Campo,and I love helping the people I’veknown all my life,” Vasquez says.

A successful co-op manager needs topossess a wide skill set. Being a talentscout is one skill that doesn’t always getadequate notice. “As a manager, you areonly as successful as the people youhave working around you,” Roppolostresses.

Co-op’s rapid growth As a rapidly growing, highly

diversified co-op with $121 million insales in 2013, United Ag needs a lot oftalent to keep all the wheels turningsmoothly. The co-op has 88 full-timeworkers, 15 part-time workers and from30 to 60 seasonal workers (mostly at itselevators).

The co-op operates: two cotton gins,four farm supply/feed/hardware stores,one of the largest capacity grainelevators in southeast Texas, a retail andbulk fuel delivery business, a loadingfacility and railcar switching yard at thePort of Victoria, a major liquid fertilizermixing plant, a full-service agronomydepartment and a cotton warehousedivision.

The predecessors of today’s UnitedAgricultural Cooperative were theFarmers Cooperative of El Campo(FCEC) (founded in 1929) and ModernFarmers Cooperative Society (founded

in 1928), which merged 1982. Therewas another merger in 2012, withDanevang Farmers Cooperative SocietyInc., Danevang, Texas, after which thename was changed to UnitedAgricultural Cooperative Inc.

Roppolo says the two co-ops hadbeen fighting for market share for manyyears prior to the merger, but at timesthey had also worked together. Manyproducers belonged to both co-ops, “sowe were offering duplicate services.”The two boards eventually got togetherand hammered out a merger plan thatwas adopted by both memberships. Thenew name was picked to better reflectthe co-op’s larger, more regionalfootprint.

“It is hard to imagine how much thisco-op has grown in just the last threeyears,” Roppolo says. But there is stillplenty of competition.

“Our competitors also have goodproducts and prices; our advantage is inservice,” Roppolo says. “We will dothings others won’t — like opening astore early to help out a good customerwho is in a jam. Any time staff can’tanswer a question, they know they cancall me.”

Grain leverage means market clout for growers

United Co-op works closely withTexas A&M University and has anumber of its graduates on staff, such asLindsey Bowers, a grain merchandiser.

“We work with producers to market

current crop and plan for future crops,”Bowers says. “Through our marketingand purchasing pool program, we areable to market large volumes of grainfor a good average price. This is

important for our growers, becausemany of them do not have large grainacreage — a 5,000-bushel contractcould be the majority of their crop.”

Pooling gives them guaranteedstorage, allowing their grain to bemarketed throughout the year, she says.“They can get a loan through the co-opat harvest to generate cash flow, butthey can then hold grain for later sale toget a better price and realize a basisappreciation. We are the only co-op inthis area that still operates a grainmarketing pool like this.”

“Our large volume gives us marketleverage, and by marketing for themembers, it is one less thing on afarmer’s always full plate.”

“I love working here,” adds Bowers,who is married to a catfish and cropsfarmer. “Most of us here are tied to agin some way, through our own familiesor by marriage. To work here, you haveto be passionate about agriculture andthe co-op — and to always keep thefarmers’ best interest at heart.”

In the tight-knit rural communitiesaround El Campo, people pull togetherwhen facing challenges, she says. “It isalso a great place to raise a family, saysthis mother of “two little boys proudlybeing brought up in agriculture.”

Cotton gins set recordCotton is United Ag’s biggest

division, and last year was the busiestseason ever for the two gins it operates.The co-op processed 150,000 bales,

“What differentiated our program was our constant presence in thefield — farmers put us on speed dial; they knew what they asked usto do would get done.”


says April Graves, United Ag’scontroller. The average “turnout” was41 percent — “a tremendous average.”It means that for every pound of trash,seed or moisture, the gin produced 41percent lint — well above the standardfor Texas, based on USDA data, she says.

Thanks to a warehouse it purchasedin 1992, United Ag can store more than30,000 bales. This gives it increasedmarketing flexibility and allows it toship directly to the port of Houston.

Being diversified is critical to the co-op’s success, Graves says. Not only doesthe co-op offer a wide variety of goodsand services to members and thegeneral public, but diversification alsogives the co-op economic resiliency.

“If one division has a hard year, itcan be offset by another division havinga strong year,” Graves says. “A small

grain crop can be offset by an awesomecotton crop, or vice versa. A droughtyear will hurt crops, but we will sellmore cattle feed.

A couple of years ago, she says theco-op “got upside down on fertilizerinventory, but other divisions helpedoffset that. Diversification helps ensurecash flow,” she says.

The co-op is further diversified bytrading with “town people” (i.e., non-farmers) through its stores. They comein to buy pet food and supplies, lawnand garden items, hardware and manyother types of items for home and yard.This trade has room to grow, because“some people still don’t realize we areopen to the general public,” Gravessays.

To be a voting co-op member, onemust produce some type of ag

commodity and pay a $50 membershipfee. Board members are elected on aone-member, one-vote basis.

“We’ve undergone a lot of growth inrecent years, and that has required theuse of capital assets,” she says. “It isalways a balancing act for our 12-member board as to how the workingcapital will be allocated.”

Leadership makes the difference

Graves says the co-op’s biggest ace is“tremendous leadership,” both in thegeneral manager’s office and in theboard room. “We wouldn’t be in thisstrong position without excellentleadership,” she stresses.

United Ag’s directors all bringlifetimes of diverse farming experienceto the board room, Gaves says. Onecommon trait they share is that “theyalways make decisions based on what isbest for the overall co-op,” even ifsometimes another decision would bebest for their own operation.

Tommy Engelke, executive vicepresident of the Texas AgriculturalCooperative Assoc., says Roppolo is thepersonification of a “multi-tasker.”United Ag Co-op is to be saluted, hesays, for its support of Texas A&M agprograms that play a crucial role inkeeping Texas agriculture strong.United Ag helped start a cottonengineering chair in the ag engineeringdepartment at Texas A&M, andRoppolo is past chairman of theuniversity’s Agriculture LeadershipDevelopment Council, he notes.

If that’s not enough, Roppolo is alsopast chairman of the state agency thatregulates the feed and fertilizerbusinesses in the state, and he was onthe executive committees of the TexasAg Co-op Council, Texas Grain andFeed Association and the Texas CottonGinners Association.

Roppolo, Engelke continues, is a co-op manager who respects the traditionsof the past, but is always open to tryingnew things. “More often than not, thenew things he tries work.” ■

Clockwise from top: Philip Merek checks on his corn crop; co-op grain merchandiser LindseyBowers says marketing jointly through the co-op’s grain pool gives producers added leverage; awater tower in El Campo, the location of United Ag’s headquarters.

In 2011, about 25 percent of Wisconsin high schoolstudents were overweight or obese (according to theCenters for Disease Control and Prevention’s (CDC)2011 Youth Risk Behavior Surveillance System findings).Furthermore, 22.6 percent of Wisconsin children areconsidered food insecure, meaning there is uncertainty ofaccess to adequate amounts and varieties of healthful foods.

One approach to addressing these growing nutritionaland diet related concerns involves increasing access tohealthy fruits and vegetables in schools. Nascentpartnerships between federal, state and local publichealth officials and agriculturalists address these issues bystimulating the development of local food systems thatincrease the production of, and access to, fresh andnutritious foods.

Farm-to-school programs are built on suchpartnerships and have the potential to bring fresh, localproduce into the lunchroom while providing a newmarket, or the ability to expand markets, for farmers.

Pairing local food system efforts with current work onfarm-to-school programs is not only needed, but timely.In 2010, the federal Child Nutrition Reauthorization Act(also called the Healthy, Hunger-Free Kids Act) passed,issuing the strictest nutritional guidelines in U.S. history.

Schools had to comply with this new law bySeptember 2012. Key provisions in the law includerequirements that school lunch programs ensure asignificant increase in students’ access to fresh fruits andvegetables. It requires that schools offer at least 3 ¾ cupsof vegetables each week and ¾ cup per day for grades K-8, and 5 cups of vegetables per week and 1 cup per dayfor grades 9-12. Specifically for the “red/orangevegetable” subgroup, schools must offer ¾ cup per weekfor grades K-8 and 1¼ cup for grades 9-12.

Nationally and in Wisconsin, this impacts the needand potential to produce more of these vegetable crops,as Wisconsin schools involved in the National SchoolLunch Program feed about 500,000 children every day.

Using global supply chains with low prices is oneapproach to increasing such food access. Buttransportation and storage can affect nutritional qualities(Edwards-Jones et al., 2008). From the moment ofharvest, nutritional loss can occur without propertransportation and storage (Goldberg, 2003; Hinsch,Slaughter, Craig & Thompson, 1993).

Local/regional solutions Local and regional production and enhanced supply

chains are needed to produce and procure more of these

crops to bring higher quality vegetables toschools. For Wisconsin vegetables growers,the increased demand for carrots, sweetpotatoes, squash and other red/orangevegetables presents an opportunity toincrease production and to access newmarkets.

The new requirements to serve morevegetables pose other challenges besidessupply and shipping. The costs of fresh andlocal fruits and vegetables, the skilled laborrequired for on-site processing andpreparation, and student food preferences allraise concerns in school districts that areseeking to comply with these new nutritionalguidelines.

When purchasing directly from farmers,schools face challenges involving distribution,coordination and consistency of product.According to the 2013 Wisconsin Farm toSchool Food Service Director Survey, ofthose not currently purchasing local produce,77 percent said that they would prefer topurchase local foods through either aproduce distributor or their prime vendor.

As school nutrition directors are facedwith tighter budgets and more restrictions,the need for affordable, healthful and locallygrown produce available through existingdistribution networks is evident.

Small and mid-sized vegetable growers areinterested in diversifying their markets toinclude schools and other institutions, but thetypical industrial supply chain infrastructuredoes not currently provide that connection.

The article on the following pages describes how staffat the Center for Integrated Agricultural Systems at theUniversity of Wisconsin–Madison worked with the FifthSeason Cooperative to address this missing connection.The article describes how partners coordinated andcooperated to create new supply chain opportunities.Together, they created markets for cosmetically imperfectseconds to create affordable, healthful and locally grownschool food options.

The story of this multi-stakeholder cooperative inWisconsin achieving these goals illustrates the potentialof cooperatives to play a significant role in successfulsupply chain partnerships.


Par tners in Heal thCo-ops have role to play in improving student nutrition

— By Lihlani Skipper and Alfonso Morales

The Fifth SeasonCooperative in Viroqua,Wis., provides crucialconnections across thefood supply chain as it

strives to help build a strongerlocal/regional food system. As a multi-stakeholder cooperative, Fifth Season

has members who represent all of thekey players in the food system at thelocal level. Co-op members includefarmers, processors, distributors,producer groups, buyers and workers.

Fifth Season operates regionallywithin a 150-mile radius of Viroqua,Wis., which includes south-central and

southwest Wisconsin, southeastMinnesota and northwest Iowa.

The co-op requires that its producebe grown within the Fifth Seasonregion. Many of the producer-membersemploy conservation growing practicesthat emphasize preservation of land,water and air, and that follow bio-


The Right BlendBy Lihlani Skipper and Alfonso MoralesUSDA Photos by Lance Cheung

Editor’s note: Skipper was a staff member with the University of Wisconsin-Madison Department of Urban and Regional Planning andthe Center for Integrated Agricultural Systems; Morales is associate professor of urban and regional planning at the university. Moralesgratefully acknowledges the U.S. Department of Agriculture, National Institute of Food and Agriculture, for its support of this study. Alsosee Sept./Oct. 2013 Rural Cooperatives, page 21, for more on Fifth Season Co-op.

Fifth Season’s vegetable mixes help scale-up Wisconsin farm-to-school marketing program


diverse production models, withminimal, or no, use of chemicalpesticides.

The co-op produces and distributeslocally grown produce, meats, dairy andvalue-added food products toinstitutional and foodservice buyersthrough its distribution member,Reinhart FoodService. The relationshipwith Reinhart is at the core of the FifthSeason’s success because it has allowedthe co-op to use existing distribution

infrastructure, rather than investing inits own.

This innovative model of a multi-stakeholder cooperative, working with abroad-line food distributor (which isrepresented on the co-op board ofdirectors) provides producers anothercritical set of services: warehousing,transportation, sales representatives anda developed customer base, whilesimultaneously providing hundreds offoodservice buyers access to locally andsustainably grown products.

The co-op also works with

businesses and organizations to provideeducation on, and increased exposureto, locally produced foods for theircustomers. This helps to buildknowledge of the farmers and theirpractices, as well as the greater value ofa regional and community food system.

Fifth Season provides services thatsignificantly benefit its growers. Thelarge volumes that are demanded byinstitutional markets are often morethan single farmers can supply. The co-

op aggregates crops from multiplefarms, allowing small producers to meetthe needed volume. It also providesthird-party GAP (good agriculturalpractices) auditing, liability insurance,fair pricing and food safety educationand training for the co-op’s growers.These services make it possible forsmall- and mid-sized growers to sell tolarger markers that are typically out ofreach for them.

Fifth Season’s multi-stakeholdercooperative structure ensures thatworking relationships exist between key

supply chain entities. Such positiveworking relationships are hard to findin mainstream supply chains that areoften marked by the volatility ofcontracts and aggressive competition.

In contrast, the co-op bringseveryone to the table to make decisionstogether for the benefit of all. In sodoing, it redistributes power across thesupply chain. The mission to create asustainable local and regional foodsystem, with fair pricing to farmers, is

prioritized in their decisionmaking,which contrasts starkly with the market-driven, mainstream food supply chain.

For example, independent small- andmedium-sized local growers selling toinstitutional markets might not receivefair pricing because the processor andthe distributor have higher margins fortheir customers and are not willing tocompromise, since they may procurecheaper product elsewhere. However,producer-members of Fifth SeasonCooperative have negotiating powerand the ability to receive fair pricing


due, in large part, to a model in whichproducers sit at the same table as theprocessors, distributors and buyers.

New market for ‘cosmetic seconds’

Many producers and producergroups are looking for markets forcosmetically imperfect seconds — good,healthy food that otherwise usually goesto waste due to slight blemishes.Schools and other institutions are alsolooking for affordable, minimallyprocessed vegetable products that arelocally grown.

Recent reports from Minnesotaindicate that crop loss can be as high as40 percent for carrots and 30 percentfor hard squash (Berkenkamp, 2014)due to cosmetic appearance. Thus, thepotential benefit to farmers who canmarket these products is significant

Sweet potatoes (below) and yellow squash and zucchini (facing page) are in demand bymany school districts that are seeking to expand their lunchroom offerings of fresh produce.

Schools across the nation are offering more fresh vegetables and fruit to students, trying toencourage them to adopt a healthier diet, a demand which producer co-ops can help meet.


(Berkenkamp, 2014). Using these“seconds” in minimally processedvegetable blends could provide profitpotential to small- and mid-sizedfarmers, while also providing anaffordable healthful product to schools.

Such an effort may seem relativelystraightforward at first — i.e., take theseconds that are being wasted in thefield and use them to make fresh-cutvegetable products for schools. Inreality, however, the task is challengingwhen working in the mainstream foodsupply chain.

Cosmetically imperfect seconds arenot currently available through mostexisting school supply chains, as USDAgrading standards largely dictate thedecisions of the produce industry;product that is not Grade A is oftendisregarded entirely (Berkenkamp,2014). In addition, the unpredictabilityof the price and supply of secondsmakes it difficult for large distributorsand processors, who typicallycoordinate with brokers instead ofdirectly with producers.

To provide the enormous volume ofproduct demanded by large-scaleprocessors in the form of seconds,supply chain partners would need toactively coordinate to identify andmarket cosmetically imperfect seconds.Seconds that are over-sized or oddlyshaped can create compatibility issueswith existing processing equipment, andthus they have the potential to posesignificant challenges to processors. Itmay not be economically viable forthose who do not see the potentialbenefit of using seconds to attempt this.

Existing contracts and relationshipscan limit the potential for usingcosmetically imperfect seconds forminimally processed vegetable productssold to schools and other institutions.

Generally, the supply chain processworks like this: the raw product, in thiscase seconds, is transported from thefarm (or first aggregated from multiplesmaller farms) to a processing facilityand is then stored for later distributionto the school buyers (see Day

Farnsworth and Morales, 2011, for amore general discussion oflocal/regional food supply chains). Thetypical broadline distributors thatusually source from large-scaleconventional farms are often unfamiliarwith how to source from, andcoordinate with, small- and mid-sizedlocal farms. Smaller producers differ inscale and transportation capabilities.

Small- and mid-sized producers whosell to commodity or institutionalmarkets are typically “price-takers,” inthat they end up being forced to submitto terminal market pricing. This is trueeven if those prices do not cover theircost of production (Day-Farnsworth &Morales, 2011). Thus, they may havedifficulty in earning profits that helpthem remain viable, especially in thecase of a minimally processed productthat involves the additional cost ofprocessing.

Direct-to-consumer sales onlyinvolve the farmer, while institutionalsales often involve other supply chainactors — such as aggregators,

processors and distributors — to moveproduct from the farm to the consumer.While the profit for the farmer fromdirect-to-consumer sales is not sharedwith these other supply chain actors,the farmer is often faced with extralabor for direct marketing. As supplychains include more players that eachrequire a piece of the pie, fair pricingfor the farmer becomes more difficultto reach.

For example, the supply chain forraw, whole sweet potatoes consists onlyof the farmer, while for fresh-cut, dicedsweet potatoes, the supply chaininvolves two or three intermediaries. Afarmer can sell whole sweet potatoes bythe pound at a farmers’ market. But fordiced sweet potatoes, the farmer mustsell and deliver the raw product to aprocessor, who then sells it in the dicedform to a distributor, who in turn sellsit to foodservice buyers.

In the second supply chain, thefarmer, processor and distributor are alllooking to make a profit, while in thefirst supply chain, only the farmer istrying to turn a profit. Thus, it isimportant when creating value-addedsupply chains to be aware of theposition of the farmer relative to thelarger, and often more powerful,processors and distributors.

Extending the season with vegetable blends

In 2012, Fifth Season Cooperativebegan working with staff at the Centerfor Integrated Agricultural Systems atUW-Madison on a project funded by aSpecialty Crop Block Grant(Wisconsin’s Harvest Medley: HealthyBlends for Wisconsin Schools) todevelop and promote locally grown,root vegetable blends for schools acrossWisconsin. The goals included creatingtwo frozen vegetable blends that utilizecosmetically imperfect seconds for saleto schools and other institutions.Distribution was to be conductedthrough Reinhart Food Service.

Some 40,000 pounds of each of theseblends were processed in November

Purchasing directly from farmers can posechallenges for schools in the areas ofdistribution, coordination and productconsistency. Co-ops and food hubs can makethese tasks easier.


2013 and sold to institutional buyers,many of which were schools, fromDecember 2013-March 2014. The rootvegetable blends were created using 90percent cosmetically imperfect seconds.The products were a success for the co-op.

Diane Chapeta, operations managerof Fifth Season Cooperative,

successfully led this project by workingwith existing co-op member farmers,processors, distributors and institutionalbuyers. She previously served as theschool nutrition director for ChiltonPublic Schools in Wisconsin, where sheincreased breakfast and lunch programparticipation and founded and managedthe Northeast Wisconsin Farm toSchool Initiative.

Chapeta’s experience as a schoolnutrition director made it easy for herto understand the position of schoolsand their unique concerns. Herexperience helped her develop twosuccessful blends of minimallyprocessed produce seconds and createrecipes that other schools could use inpreparing and serving them.

Starting from scratch, Chapetadeveloped the two vegetable blends,testing different combinations ofpotatoes, beets, turnips, squash, carrotsand parsnips. The trial batches werecreated at a small, shared-use incubatorkitchen (Sharing Spaces Kitchen) inPrairie du Chien, Wis., paving the wayfor that kitchen to delve into frozenprocessing of local vegetables.

After trials and taste tests werecompleted in two schools, the blendswere approved for production and theWisconsin Potato Fusion and WinterMoon Blend became a reality. TheWisconsin Potato Fusion consists of

three, skin-on potato varieties, all ofwhich are seconds from Coloma Farmsin Coloma, Wis. The Winter MoonBlend contains carrots, butternutsquash, gold potatoes and red andgolden beets.

The beets and butternut squash weresourced through co-op member

Organic Valley/CROPP Cooperative.Coloma Farms provided the goldpotatoes, and Sno Pac Foods inCaledonia, Minn., provided the carrotsfor the Winter Moon Blend.

Organic Valley Cooperative has beenworking since 1988 to offer sustainablemarkets to family-sized organic farms.It is a farmer-owned cooperative andcurrently involves 140 produce farmersin the Driftless area of Wisconsin. ForOrganic Valley, a family farm is definedas one where the family membersprovide the primary workforce and thefarm is their livelihood.

Organic Valley aggregates cropsfrom farmers to provide large volumesof product to the Fifth SeasonCooperative.

Cooperation among co-ops For many years, Organic Valley has

been looking for markets for produceconsidered cosmetically imperfect, suchas butternut squash with scarring on theskin. Fifth Season Co-op providedOrganic Valley with a new market forthese products by using them in thevalue-added frozen vegetable blends.This cooperative relationshipexemplifies Cooperative Principal No.6: Cooperation among cooperatives,and shows the power of cooperativesworking together to achieve mutuallybeneficial goals.

After the recipe trials, Fifth SeasonCooperative approached Sno Pac Foodsand contracted for the first productruns. Sno Pac Foods is a family-ownedbusiness that uses an IQF (IndividualQuick Frozen) freezing process forcertified organic, frozen vegetables. SnoPac, like many mid- to large-size

processors, requires minimum productruns to ensure profitable operations. Inthis case, a 40,000-pound minimum ofraw product is the smallest viable runfor the facility.

However, the co-op needed proof ofthe viability of sales for the two 40,000-pound-minimum runs. An online pre-order system was set up to quantifydemand for the product. Fifth Seasons’unique multi-stakeholder structureencourages checks and balances acrossthe supply chain, thus the pre-orderprocess was the obvious next step.

The chief difficulty here wasconvincing school personnel to modifyexisting organizational habits. Forexample, school nutrition directors werefamiliar with existing supply chainrelationships, the existing economicstructures and the standard orderingsystem. The pre-ordering process wasentirely unfamiliar to them, but it wasneeded by Fifth Season to prove thatthe demand for the products existed.

Once schools and other institutionalbuyers realized how convenient theselocally grown and affordable productswould be to order through Reinhart,they were eager to pre-order the frozenblends.

Because pre-orders exposed a highlevel of interest, the co-op movedforward with the processing of both

Producer-members of Fifth Season Co-op have negotiating power andthe ability to receive fair pricing due to a model in which producers sitat the same table as the processors, distributors and buyers.

continued on page 45

Phot

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o-op

Long Run


By E. Eldon Eversull,Senior Agricultural EconomistUSDA Cooperative Programs

For acooperative —or any business,for that matter— to operate

for a century is an amazingaccomplishment. Given theintense levels of competition ina capitalistic economy such asours, only a small percentage ofbusinesses reach their 100thbirthday. But the number ofcooperatives reaching theimportant “century milestone”is steadily increasing andcurrently stands at 134.

By comparison, Standard andPoor’s “Capital IQ” lists 488publicly traded companies thatare 100 years old, as of 2009.Vicki TenHaken, a professor atHope College in Michigan,maintains a list of 540 U.S.firms more than 100 years old.There were nearly 5.7 millionfirms listed by the 2011 U.S.census. So, if there were even1,000 companies that are 100years old, that would be onlyabout two one-hundredthspercent (0.02 percent) of allU.S. firms. It thus appears thatthe longevity of so manyagricultural cooperatives issomething of an anomaly in thebusiness world.

Starting a cooperative 100years ago required — as it stilldoes today — the convergenceof a committed group ofproducers who were willing towork together and poolresources to achieve a criticalmission. This most often was tomarket, store and/or processtheir crops and livestock or toattain quality farm productionsupplies and related services at areasonable cost.

NUMBER OFAG CO-OPS

CELEBRATING

ANNIVERSARIESON THE RISE

The


Clockwise from upper left:Horsepower still prevailed for milkdeliveries during the early days of theNelson Creamery Co-op inMinnesota; a vintage ad for Dairyleamilk (now part of DFA); employees ofForbes Equity Union gather in Forbes,N.D.; nice wheels: an ElmdaleCreamery (Minnesota) co-op deliverytruck; board members of FruitGrowers Supply in California tourforest land the co-op purchased tosupply wood for crates; on the citruspacking line at Sunkist in California;celebrating the first delivery ofphosphate fertilizer from a Wisconsinplant at Aurora Cooperative inNebraska. Photos courtesy picturedcooperatives.

Staying in business for100 years requires that a co-op:• Offers members quality

products or services;• Has members who are

committed to doingbusiness with the co-opand who participate in itsdemocratic governance byvoting in elections and byserving on the board andco-op committees;

• Hires skilled managementto run the business and hasknowledgeable directors togovern the co-op;

• Is committed to deliveringsuperior customer service;

• Operates with a strategicbusiness plan based onpresent and future needsand goals;

• Has a viable leadershipsuccession plan in place;

• Has a solid financial planthat includes sufficientinvestments in the futureof the co-op and itsfacilities while returningfair levels of equity tomembers;

• Hires skilled, motivatedemployees and rewardsthem with competitive payand benefits;

• Is an active supporter ofthe communities where itdoes business and where itsmembers and employeeslive and work.While there are also many

other factors that have animpact on the longevity of aco-op, one over-riding factoris this: to remain in businessfor 100 years, a co-op needsto evolve with changing

clientele tastes andpreferences and adapt to newchallenges.

As part of its annualsurvey of U.S. farmer,rancher and fisherycooperatives, the

Cooperative Programs ofUSDA Rural Developmentin 1999 asked what year aco-op had been organized in.About 33 percent of the3,466 co-ops surveyed thatyear responded to the

question. Based on that data,the largest number ofcooperatives in USDA’sdatabase (205 cooperatives)that are still in operationwere organized between1931 and 1940 (figure 1).


Table 1 — U.S. Century Cooperatives, by state, type, and date organized

Cooperative name, city, and state Type Organized

Sunkist Growers Inc., Sherman Oaks, CA Fruit and vegetable 1893Fillmore-Piru Citrus Association, Piru, CA Fruit and vegetable 1897Fruit Growers Supply Company, Sherman Oaks, CA Supply 1907Blue Diamond Growers, Sacramento, CA Nut 1910Butte County Rice Growers Association, Richvale, CA Supply 1914Agfinity, Inc., Eaton, CO Supply 1905Haines City Citrus Growers Association, Haines City, FL Fruit and vegetable 1909Lake Region Packing Association, Tavares, FL Supply 1909Winter Haven Citrus Growers Association, Dundee, FL Fruit and vegetable 1909Waverly Growers Cooperative, Waverly, FL Fruit and vegetable 1914First Cooperative Association, Cherokee, IA Grain and oilseed 1887Calhoun Cooperative Creamery Company, Lansing, IA Dairy 1896Farmers Lumber Company, Rock Valley, IA Supply 1904River Valley Cooperative, Eldridge, IA Grain and oilseed 1906Cooperative Elevator Association, Ocheyedan, IA Grain and oilseed 1906Archer Cooperative Grain Company, Archer, IA Grain and oilseed 1907North Central Cooperative, Clarion, IA Grain and oilseed 1907Farmers Coop Elevator Company, Kingsley, IA Grain and oilseed 1907Farmers Cooperative Society, Sioux Center, IA Grain and oilseed 1907Hull Cooperative Association, Hull, IA Supply 1908Farmers Cooperative Company, Remsen, IA Grain and oilseed 1910Farmers Cooperative Company, Hinton, IA Supply 1912Pacific Northwest Farmers Cooperative, Inc., Genesee, ID Grain and oilseed 1909Goodwine Cooperative Grain Company, Goodwine, IL Grain and oilseed 1889Stanford Grain Company, Stanford, IL Grain and oilseed 1895Farmers' Grain & Coal Company, Mason City, IL Grain and oilseed 1899Grainland Cooperative, Eureka, IL Grain and oilseed 1903Graymont Cooperative Association, Graymont, IL Grain and oilseed 1903Ludlow Cooperative Elevator Company, Ludlow, IL Grain and oilseed 1904Danvers Farmers Elevator Company, Danvers, IL Grain and oilseed 1904Earlville Farmers Cooperative Elevator Co., Earlville, IL Grain and oilseed 1905Minier Cooperative Grain Company, Minier, IL Grain and oilseed 1907Cissna Park Cooperative Inc., Cissna Park, IL Grain and oilseed 1908Donovan Farmers Co-operative Elevator, Inc., Donovan, IL Grain and oilseed 1908Northern Partners Cooperative, Mendota, IL Grain and oilseed 1908Chapin Farmers Elevator Company, Chapin, IL Grain and oilseed 1908Burtonview Cooperative, Lincoln, IL Grain and oilseed 1909Milledgeville Farmers Elevator Company, Milledgeville, IL Grain and oilseed 1911

There were also waves ofag co-op formations in otherdecades, with many of thoseco-ops still in business today.Of the ag co-ops formedfrom 1911 to 1920, 123remain in business; of ag co-

ops formed from 1921-1930,171 are still in business; of agco-ops formed from 1941 to1950, 177 are still servingmembers.

USDA CooperativePrograms’ list of

cooperatives has evolved overtime as new co-ops arelaunched, go out of businessor combine with othercooperatives or investor-owned firms. Comparing the1999 database with the

current one reveals that 49cooperatives that providedtheir organization date inUSDA’s 1999 survey are nolonger on the list, due eitherto merger, consolidation orbusiness failure.

Looking at the entire1999 co-op list, however, wecan see many more changes;1,191 other cooperatives areno longer in the 2013database, due to the samethree reasons listed above.

“Century Co-ops”Century Cooperatives in

USDA’s database arecomprised of co-ops thatwere started between 1887and 1914. The vast majority(77 percent) of these 134cooperatives were startedbetween 1905 and 1914.From a historicalperspective, consider that themajority of thesecooperatives were formedjust after the Wrightbrother’s first powered airflight and before World War1.

These 100-year-oldcooperatives first catered tofarmers, ranchers andfishermen whose main formof transportation was viahorse and sailboat. Co-opproduct lines and servicesevolved from those horse-and mule-powered daysthrough the industrializationof farming and thechangeover to tractor-powered farming; these co-ops then evolved again toembrace the technologyrevolution, with more


Tremont Cooperative Grain Company, Tremont, IL Grain and oilseed 1911Kasbeer Farmers Elevator Company Cooperative, Kasbeer, IL Grain and oilseed 1912McNabb Grain Company Inc., Mc Nabb, IL Grain and oilseed 1913Andres & Wilton Farmers Grain & Supply Co., Peotone, IL Grain and oilseed 1913Rees Farmers Elevator, Franklin, IL Grain and oilseed 1913Ag Plus Inc., South Whitley, IN Grain and oilseed 1912Delphos Cooperative Association, Delphos, KS Supply 1901Southern Plains Coop, Lewis, KS Grain and oilseed 1902Golden Belt Cooperative Association Inc., Ellis, KS Grain and oilseed 1903Midway Co-op Association, Osborne, KS Grain and oilseed 1908Central Plains Co-op, Smith Center, KS Grain and oilseed 1908Offerle Co-op Grain & Supply Company, Offerle, KS Grain and oilseed 1910Farmway Co-op Inc., Beloit, KS Supply 1911Farmers Cooperative Elevator Company, Nickerson, KS Supply 1911Farmers Union Mercantile & Shipping Association, Stockton, KS Grain and oilseed 1911Minneola Coop, Inc., Minneola, KS Grain and oilseed 1912Saint Francis Mercantile Equity Exchange, Saint Francis, KS Grain and oilseed 1913Fowler Equity Exchange, Fowler, KS Grain and oilseed 1914Beardsley Equity Co-op Association, Inc., Atwood, KS Grain and oilseed 1914Thornwell Warehouse Association, Lake Arthur, LA Supply 1913Hardwick Farmers Cooperative Exchange, Hardwick, MA Supply 1914Farmers Cooperative Grain Company, Kinde, MI Supply 1914Rock Dell Cooperative Creamery Company, Byron, MN Dairy 1889River Region Cooperative, Sleepy Eye, MN Grain and oilseed 1890Dassel Cooperative Dairy Association, Dassel, MN Supply 1894Nelson Creamery Association, Nelson, MN Dairy 1894Nelson & Albin Co-op Mercantile Association, Saint James, MN Supply 1894Nassau Farmers Elevator Company, Nassau, MN Grain and oilseed 1899Plainview Milk Products Cooperative, Plainview, MN Dairy 1899Elba Cooperative Creamery Association, Elba, MN Dairy 1902Farmers Cooperative Elevator Company, Rushford, MN Supply 1903Harvest Land Cooperative, Morgan, MN Grain and oilseed 1904Rose Cooperative Creamery Association, Eagle Bend, MN Supply 1905Farmers Cooperative Ag Service, Greenbush, MN Supply 1905Farmers Elevator Company, Pelican Rapids, MN Supply 1905Meadowland Farmers Cooperative, Lamberton, MN Grain and oilseed 1905Rothsay Farmers Cooperative, Rothsay, MN Grain and oilseed 1905Wheaton-Dumont Cooperative Elevator, Wheaton, MN Grain and oilseed 1905


Table continued on page 22

producers increasingly usingGlobal Positioning System(GPS) gear to guide theirseed and fertilizerapplications and who trackmarket trends andthreatening weather frontswith their smart phones.

Century Cooperatives arestill fairly rare, accountingfor about 6 percent ofUSDA’s entire list of agcooperatives. Four types ofcooperatives make up over97 percent of all CenturyCooperatives. Grain/oilseedand farm supply cooperativescomprise more than 78percent of the CenturyCooperatives; they comprise62 percent of the list of allag co-ops. Dairycooperatives make up about13 percent of Century Co-ops, while fruit and vegetablecooperatives comprise 7percent.

By state, the nation’s 134oldest cooperatives are mostlikely to be located inMinnesota (35), Illinois (20)or Iowa and Kansas (bothwith 13).

An old business adage is:“you have to grow tosurvive.” But growth is notan all-determining factor forCentury Cooperatives.Fourteen percent of thesecooperatives have less than$5 million in sales (Figure 2).Eight percent have from$500 million to more than a$1 billion in sales. But thelargest group of CenturyCooperatives has from $25million to less than $50million in sales (19 percent,or 26 cooperatives).

The Century ListAll 134 Century

Cooperatives were asked fortheir agreement to be listedin Table 1. (USDA gathers


Valley Creamery Association, Garfield, MN Dairy 1905Hadley Farmers Elevator, Hadley, MN Grain and oilseed 1906Swanville Cooperative Creamery Association, Swanville, MN Dairy 1907Fosston Cooperative Association, Fosston, MN Supply 1907Bongards Creameries, Bongards, MN Dairy 1908Elm Dale Creamery Association, Bowlus, MN Dairy 1908Farmers Cooperative Creamery Association, Goodridge, MN Supply 1908Farmers Cooperative Creamery, Foreston, MN Dairy 1908Farmers Elevator of Fergus Falls, Fergus Falls, MN Grain and oilseed 1909FCA Co-op, Jackson, MN Grain and oilseed 1909Osakis Creamery Association, Osakis, MN Dairy 1909Kragnes Farmers Elevator Company, Glyndon, MN Grain and oilseed 1911Co-op Service Inc. of New York Mills, New York Mills, MN Supply 1911Farmers Cooperative Elevator Company, Hanley Falls, MN Grain and oilseed 1912Newfolden Cooperative Elevator Association, Newfolden, MN Grain and oilseed 1912Lakes Area Cooperative, Perham, MN Dairy 1912Equity Elevator & Trading Company, Wood Lake, MN Grain and oilseed 1912Hastings Cooperative Creamery Company, Hastings, MN Dairy 1913Sobieski Cooperative Creamery Association, Little Falls, MN Dairy 1913Farmers Cooperative Company, Windsor, MO Supply 1914MFA Incorporated, Columbia, MO Supply 1914Edinburg Farmers Elevator Company, Edinburg, ND Grain and oilseed 1909Brocket Equity Elevator Company, Brocket, ND Grain and oilseed 1911Max Farmers Elevator, Max, ND Grain and oilseed 1911Forbes Equity Exchange, Forbes, ND Grain and oilseed 1913Scranton Equity Exchange, Scranton, ND Grain and oilseed 1914Farmers Cooperative, Dorchester, NE Grain and oilseed 1903Farmers Cooperative Association, Eustis, NE Grain and oilseed 1903Cooperative Producers, Inc., Hastings, NE Grain and oilseed 1906Aurora Cooperative Elevator Company, Aurora, NE Grain and oilseed 1908Farmers Cooperative Company, Tallmadge, NE Grain and oilseed 1914Landisville Produce Cooperative Association Inc., Landisville, NJ Fruit and vegetable 1913Jewell Grain Company, Jewell, OH Grain and oilseed 1911Gerald Grain Center Inc., Napoleon, OH Grain and oilseed 1912Farmers Elevator Grain & Supply Association, New Bavaria, OH Grain and oilseed 1912The Hicksville Grain Company, Hicksville, OH Grain and oilseed 1914Carrier Mill and Elevator Company, Carrier, OK Grain and oilseed 1907Farmers Exchange of Goltry, Goltry, OK Grain and oilseed 1913Tillamook County Creamery Association, Tillamook, OR Dairy 1909Diamond Fruit Growers Inc., Odell, OR Fruit and vegetable 1913Lawrence County Co-op Wool Growers Association, Pulaski, PA Wool 1891Clark County Farmers Elevator, Clark, SD Grain and oilseed 1904Menno Lumber Company, Menno, SD Supply 1905Colton Farmers Elevator, Colton, SD Grain and oilseed 1910Fulton Farmers Elevator Company, Fulton, SD Grain and oilseed 1912AgFirst Farmers Cooperative, Brookings, SD Grain and oilseed 1913Farmers Cooperative Elevator Company, Rosholt, SD Grain and oilseed 1914Rule Co-op Gin & Elevator Company, Rule, TX Cotton ginning 1913Blue Star Growers Inc., Cashmere, WA Fruit and vegetable 1907Davenport Union Warehouse Company, Davenport, WA Grain and oilseed 1909Odessa Union Warehouse Cooperative, Odessa, WA Grain and oilseed 1909Blue Bird Inc., Peshastin, WA Fruit 1913Westby Cooperative Creamery, Westby, WI Dairy 1903Garden Valley Cooperative, Waumandee, WI Supply 1904Ellsworth Cooperative Creamery, Ellsworth, WI Dairy 1910Medford Cooperative Inc., Medford, WI Supply 1911


Table 1 — continued


co-op data on condition thatit be used only for compositenumbers for all co-ops or co-op sectors; we do not revealsurvey data about a specificco-op unless the co-opprovides its permission — asoccurs with our annual Top100 Co-op list each fall).Two of the Century

Cooperatives chose not to beincluded on table 1 (moreinformation on theseCentury Cooperatives can befound in the Directory ofRural-Farmer, Rancher, andFishery Cooperatives on ourwebsite, www.rurdev.usda.gov/BCP_Coop_DirectoryAndData.html).

In the next six years, thislist will almost certainlydouble, as it appears likelythat 125 more cooperativeswill be added to it, althoughsome will doubtless “fallfrom the ranks” due tomergers, acquisitions andbusiness failures.

Author’s note: If your

cooperative should have beenincluded, or would like to beincluded on this list in thefuture, please e-mail the authorwith your basic co-opinformation at: [email protected], and/or atcoopinfo@ wdc.usda.gov. Pleaseinclude the year your co-op wasformally organized. ■

The growing list of ag co-ops thathave been in business for at least100 years includes, from left: theAlta Grain Co-op in Iowa, nowcalled First Cooperative Assoc.;Westby Cooperative Creamery inWisconsin and Sun Maid Raisinsin California. Photos courtesypictured co-ops

1900 & Before 1901-1910 1911-1920 1921-1930 1931-1940 1941-1950 1951-1960 1961-1970 1971-1980 1981-1990 1991-2000 2001-2013

Figure 1 — U.S. cooperatives that are still in operation, organizational dates

300

250

200

150

100

50

0

Number

Years

Less than 5 5 – 9.9 10 – 14.9 15 – 24.9 25 – 49.9 50 – 99.9 100 – 199.9 200 – 499.9 500 – 999.9 1 Billion +

Figure 2 — U.S. Century Cooperatives, number by sales size300

50

40

30

20

10

0

Number

Million $ in Sales


A ‘HUMAN SOUL ON FIRE

WITH GREAT CAUSE’William Hirth’s iron-forged will and vision

were essential to the formation of MFA


By Chuck LayDirector of CommunicationsMFA Incorporated

Hirth the organizerWilliam Hirth burned brightly. A

first-class orator, a genius oforganization and a national politicalleader, Hirth bent the world to his will.It was a capacity that brought himacolytes as well as critics, both in histime and since. Alternately, he wasvilified as domineering, utterly withouthumility and bellicose by his critics,especially those in academia.

Yet to his supporters, Hirth — thefarm boy who rose from obscurity on aRush Hill farm in central Missouri tobecome a national farm leader whodined with presidents and senators —was a dynamo of leadership, a manobsessed with changing the lives of

farmers for the better. Hirth’s vision?The creation of the farm organizationwhich became MFA — a battle herefused to lose.

Hirth created the Missouri FarmersAssociation, one of the 20th century’smost successful and dynamiccooperatives and one still thriving inthe 21st century. Seven farmers fromthe Newcomer Schoolhouse Farm Clubnear Brunswick, Mo., are rightly praisedas the genesis of the organization. Butmake no mistake, they followed thetemplate Hirth forged. Hirth wroughtthat template (even to the extent ofconceiving the famous shield logohimself) through passion, persuasion,skill and no small amount of luck.

Born March 23, 1875, Hirth wasraised on the family farm in AudrainCounty, Mo. His experience of thesoul-dampening drudgery of 1800s farm

life was acquired firsthand. He leftcollege after several years, nearlypenniless, to sell insurance. Heprospered. By 1900, he and his newwife, Lillian Vincent, moved toColumbia, Mo., where he read law andwas admitted to the bar.

In 1906, he purchased the ColumbiaStatesman newspaper. But agriculturecontinued to hold his interest. By 1908,he realized his dream of developing astatewide agricultural publication whenhe purchased The Missouri Farmer andBreeder, now Today’s Farmer. The firstissue was published Oct. 15, 1908. InFebruary 1912, he shortened the nameto The Missouri Farmer.

By 1914, The Missouri Farmer, widelypopular in state agricultural circles, wasthe official publication for the MissouriFarm Management Association, theMissouri Cattle Feeders Association,

In the century since the MFA Inc. cooperative was formed, muchabout agriculture has changed. Those 100 years represent greattechnological progress. That timespan has literally brought us fromhorse power to computer-driven machines and satellites as commontools. Even with such technological advances, the initial reasons forforming MFA remain as the underpinning for the business today.

MFA Incorporated is a regional farm supply and grain marketing cooperative serving45,000 members. MFA has about $1.5 billion in annual sales.

When farmers joined to start MFA, they did so because they needed a presence in themarket — both in buying and selling. They needed ways to finance their operations.They needed bargaining power.

MFA remains, as it began, a conduit to help farmers succeed. William Hirth is considered the founder of MFA and was a major player in the

cooperative movement in the United States. The following article about Hirth isexcerpted from a new book, Proud Past, Bright Future: MFA’s First 100 Years.Written by Chuck Lay, the book recounts stories of MFA’s leadership, its businessventures and the failures and successes that have shaped this business.


the Missouri Corn GrowersAssociation, the Missouri Draft HorseBreeders Association, the MissouriDairy Association and the MissouriSheep Breeders Association. Hirthowned the tabloid magazine until hisdeath in 1940.

The Missouri Farmer provided Hirthwith a platform to evangelize. Print wasking. The first commercial radiobroadcast was eight years in the future.Telephones were nonexistent.Electricity was enjoyed only by selecturban elite.

The Missouri Farmer hit a rural nerveand drew instant response. Hirth’spassion was organization, which he sawas key to improving farm life. Hirthpreached organized cooperationrepeatedly in its pages. Aaron Bachtel, afarmer and stockman just north ofBrunswick, was a subscriber who tookHirth’s ideas seriously.

“In the February 1914 issue,”Bachtel said, “there was a short articlewherein it stated that farmers shouldorganize into school district FarmClubs and how they could be benefitedby such organizations. It looked sosimple and at the same time so farreaching, that it appealed to me veryforcibly.”

Bachtel wrote Hirth, asking for abundle of the papers to distribute to hisneighbors. He asked those sameneighbors to meet at the NewcomerSchoolhouse the following Tuesdaynight.

A prominent farmer, Bachtel lent hisname and reputation to the cause. Heasked his neighbors to unite in thepurchase of farm supplies and inputs.By seizing the initiative, Bachtelovercame local doubt and skepticism toconvince others that Hirth’s idea toorganize farmers around a cooperativeconcept was sound. The group pooledan order for 1,150 pounds ofpenitentiary binder twine and sent it toHirth in Columbia. The NewcomerSchoolhouse Farm Club volume buynetted the men $400 in savings.

That Newcomer Schoolhouse FarmClub order, the first Hirth received,counted as the creation of the Missouri

Farmers Association. It marked thebeginning of what grew into acooperative devoted to pooling ordersand distributing accumulated savings.

The farm club idea swept thecountryside, according to historians,like a prairie fire. Subsequent to thatfirst order, Hirth contracted with theWest Virginia Coal Co. at a set pricefor coal. Bachtel and his neighbors wereon board.

Soon after the order, coal pricesjumped, but the fledgling MFA had acontract at the cheaper price. Bachtelreceived several carloads and proceededto instruct area farmers in the value ofthe farm clubs. More members quicklyflocked to the club. Throughout thestate, the scene was repeated, time andagain.

1,000 MFA farm clubs formedFor perspective on the “prairie-fire”

metaphor, consider: within five years,about 1,000 MFA farm clubs werecreated, representing every corner ofthe state. Just over 10 years later, Hirthcould announce the existence ofhundreds of exchanges, elevators,central produce plants, creameries,livestock shipping associations, livestockcommission companies, a graincommission company, a purchasingdepartment and produce sales agencies.All told, these fledgling creationsdedicating themselves to MFA weregenerating gross sales of more than

$100 million.Bachtel would serve as president of

MFA’s first farm club and become thefirst farmer to sign MFA’s unique, butdoomed to fail, producer contract.Bachtel would log 20 years ofdistinguished service on MFA’scorporate board of directors.

Through the pages of The MissouriFarmer, Hirth chronicled farmer effortsand savings of farm clubs, urgingcontinued development of more clubswhere farmers could organize andsocialize in much the same way townbusinesspeople joined business, politicaland benevolent organizations. Self-interest, said Hirth, should be a naturaldraw for historically independentfarmers.

Yet organizing often isolated farmfamilies was a steep hill. Hirth,nevertheless, was wildly successful inconvincing farmers of the benefits ofcooperation, due in main to the force ofhis personality and his frenetic, butstrategic, schedule.

Farm clubs structured meetings,printed songbooks, formed a women’sauxiliary organization (Women’sProgressive Farmers Association orWPFA in 1921) and scheduled debates.Hundreds of clubs held debates everytwo weeks, organized fishing trips, heldparades several miles long and hostedbarbecues. The spirit of a camp revivalwas in the air.

At those meetings, Hirth encouragedfarmers to spread the gospel, notingthat although many farmers wereuncomfortable in the speaker’s role, itwas a mission worth the effort. Trueoratory, he intoned, was not faultlessdiction or learned phrases. True oratory“is a human soul on fire with a greatcause.”

Hirth leverages farmers’ new power

Demonstrating the effectiveness ofthe power of centralized buying, offerspoured in from flour mills, Ford andDodge motor companies, tiremanufacturers, seed merchants and newanimal health businesses like AnchorSerum Company of St. Joseph.

The farm club idea swept thecountryside,according tohistorians, like aprairie fire.

MFA awarded the Home Guard Medal tomembers of the Women’s ProgressiveFarmers Assoc. for enlisting new membersand organizing clubs.


In 1919, Hirth listed the farm clubaccomplishments to date. Farm clubs,he wrote, have: (1) placed members inposition to buy farm needs at lowestwholesale price; (2) financed and takenover 60 local elevators with plans for150 before 1920; (3) been first tointroduce a Livestock ShippingAssociation in Missouri; (4) financed aflour mill costing $300,000; (5) securedregulation changes regarding thehandling of meat under the FoodAdministration; (6) met with J. OgdenArmour as the first organized effort towork out a solution to packing interest;and (7) organized farmers to influencelegislation.

By way of explanation of thoseaccomplishments, Hirth, with theexecutive committee and the full boardof directors of the nascent MFA, hadlobbied newspaper editors andlawmakers for passage of an agriculturalcooperative law allowing patronagerefunds and streamlining cooperativepractices. They also fought for and wongovernment standardization of weightsand measures for business scales thathad been a bit haphazard before.

MFA sponsored a legislative dinnerin Jefferson City to explain farmers’intentions in building self-helpcooperatives. MFA’s corporate boardsponsored the law and saw to its passageby the newly lobbied legislature in1919.

Just a year before, Hirth, never oneto think small, took a group of officialMFA representatives to Washington,D.C., to meet with the AgriculturalCommittee of the Senate to explainMFA’s position on a federal cattle andhog feeder program. In each case, Hirthwas upfront on intentions. MFA wouldbe known for putting cards on the tablefrankly, in full view. No subterfuge forthe new MFA.

Hirth the politician MFA needed more than organizing;

it required political capital, both stateand national. Hirth was uniquely suitedfor that job. By the mid-1920s, he was amember of the executive committee ofthe American Council of Agriculture,

representing MFA. More importantly,on the national scene in 1925, the CornBelt Committee was organized with amembership drawing together thelargest group of influential farm leadersin the country.

The Corn Belt Committeerepresented 24 farm groups, includingFarm Bureau, Farmers Unions, theEquity, the Grange and multiple CornGrowers Association groups, as well asmany others. The group’s purpose wasto speak on agricultural legislation asone, make agriculture’s positions knownto legislators and the public andpronounce “upon all mattersconcerning agriculture.”

Hirth was selected president of thenewly formed Corn Belt Committeeand retained that position for severalyears. In his capacity as chairman, Hirthhelped make agriculture a nationalconcern. His speeches and activities alsoattracted the attention of nationalleaders, including one who would soonbe mulling a presidential bid —Franklin Delano Roosevelt, thengovernor of New York.

Hirth held that national attentionuntil his death. And with good cause.Because of his national leadershipefforts and accomplishments, Hirth’sname would be formally submittedunanimously by the entire Missouridelegation — Democrats andRepublicans — to President CalvinCoolidge for the position of secretary ofagriculture. Hirth demurred, askingthat his name be withdrawn.

Road builderBut Hirth’s focus was not simply

national. Missouri had plenty ofobstacles for farmers trying to grow andmove products. Country roads wereimpassible for large chunks of the yearmaking it difficult if not impossible todeliver farm products to towns andMFA markets.

Solution? Hirth jumped with bothfeet into initiating legislationauthorizing farm-to-market roads andpersonally lobbied political leaders andnewspaper editorial boards. Throughhis highly influential The Missouri

Farmer, he chronicled his efforts andurged the membership to lobbyalongside.

“Many times during recent years, thefarmers of North Missouri were hardlyable to bury their loved ones because ofbad roads,” intoned Hirth in a speech atthe MFA convention, “while theirchildren are forced to wade ankle deepthrough mud in going back and forth toschool, and so bad roads often keep ourfew remaining rural churches closed forweeks at a time.”

He convinced the organization andits board to get behind legislationpulling farmers out of the mud.

Road legislation soon passed at thestate level. In the long term, thelegislation failed to achieve all Hirthdemanded because of what Hirthdescribed as a politically controlledHighway Administration. The MissouriFarmer, he said in 1928, “is unalterablyopposed to any more bond issues forcross-state highways until somethingsubstantial has been done for theneglected dirt roads.”

Hirth carried on his farm-to-marketroad campaign until his death in 1940.His successor would deliver Hirth’spromised improvements.

One more revelatory anecdote aboutHirth: After delivering testimony to theSenate Agriculture Committee in 1940,Hirth turned on his heel and stalkedout of the room. U.S. Secretary ofAgriculture Henry Wallace, who hadattended, chased after Hirth, finallycatching him in the Senate corridor.“Mr. Hirth,” he is reported to have said,“Mr. Hirth,” he repeated when Hirthstopped and turned to face Wallace.“You didn’t give that committee someof the facts.” Hirth scrunched down hiseyebrows, scowled at the U.S. Secretaryof Agriculture and said, “Facts? Thatcommittee didn’t need facts. Theyneeded their minds changed.”

In his many years of leadership withMFA, it is safe to say Hirth changed agreat many minds, both in Washingtonand on farms all across the nation,about cooperatives and how they couldcontribute to the success of theirfarmer-members. ■


By Lisa Moorhouse

Editor’s note: This article is reprinted from“C” magazine, the member publication ofCHS Inc., where Moorhouse is a member ofthe communications staff. CHS Inc. is justone of the many co-ops nationally thatprovide good jobs for America’s ArmedForces veterans after they leave the service.The “Co-ops & Community” pagespotlights co-op efforts that fulfill themission of commitment to community. Ifyou know of a co-op, a co-op member or co-op employee whose efforts deserve to berecognized on this page, please contact:dan.campbell @wdc.usda.gov.

In 2003, Army combatengineer Mike Tangen found

himself in the Kuwait deserttraining for Operation

Enduring Freedom. When the“go” signal came, in the form of36 overhead artillery shots, the

troops and Apache helicoptersheaded out in long convoys across

the Iraq border.“The convoy moved so slowly,”

Tangen recalls. “I felt like we werehundreds of miles from the border andjust crawling. There were some nerve-wracking parts, especially when we wentthrough a narrow pass where there wassupposed to be an ambush.”

Although there was a firefight, theymade it to the border relativelyuntouched. They punched throughsand berms surrounding the countryand advanced on Baghdad.

Tangen’s job in the U.S. Armyfocused on designing battlefields. Hisskills didn’t seem likely to transfer to acareer back home in central Minnesota.After returning to the United States in2003, he purchased a small herd of

cattle and later went to work for an areafarmer, spending much of his time as along-haul trucker. With a young family,though, he was ready to have more timeat home.

“I came in as the new guy, but not anunknown guy,” he says about joiningthe agronomy team at CHS PrairieLakes in Starbuck, Minn. He works inthe location’s energy department and

Co-ops & CommunityComing Home — Skills learned in the military often transfer to the rural workforce

Mike Tangen


delivers propane. “There’s a real sense of teamwork

and camaraderie here that is verysimilar to my military experience. Iwork with guys from differentbackgrounds, but we’re all focused ongetting the job done, even if that isdelivering propane at 3 a.m.,” he says.

Soldier supportTransitioning back to civilian life

isn’t easy. Just ask Colonel AllanLanceta, central region director forU.S. Army Soldier for Life, which helpsreintegrate veterans into civilian life.

Lanceta is on a dual mission: to helpmilitary veterans find meaningfulemployment and to build understandingof the value of hiring veterans.

“Military personnel bring specialskill sets to the workplace. Loyalty,dedication, duty and respect areingrained in our soldiers,” says Lanceta.Each year, about 234,000 soldiers endtheir service with the U.S. Army, AirForce, Coast Guard, Marine Corps andNavy. In the next 10 years, more than 1million soldiers will transition from theArmy.

One focus of Soldier for Life isensuring that soldiers leaving the Armyhave a job waiting.

“It can be a challenge to translatemilitary experience into civilian terms.That can make it hard to find a job,even when the skill set might be aperfect match. We’re helping soldiersoutline skills in non-military terms,”says Lanceta, who recommends Hero toHired (H2H.jobs) for transitioningmilitary personnel. It offers careerexploration tools, military-to-civilianskills translation, and education andtraining resources.

“We’re also working with companiesto help them understand whatindividuals with military experiencebring to the workplace,” adds Lanceta.CHS is one of those companies.

“We look at the ability of individualswith military backgrounds to solveproblems and work in stressfulsituations. We look at how thosemilitary values align with CHS values,

and we see a good fit for CHS and thecooperative system,” says Cate Sprout,talent acquisition manager.

“By focusing on helping militarypersonnel translate the characteristicsand the skills gained in the military intocivilian language, we can help oursoldiers and companies understand howmilitary roles translate to theworkforce,” Lanceta says.

Valuable Experience Ken Paulson has always been

fascinated by how things work.Growing up, he worked alongside hisdad, who owned a body and mechanicsshop. He applied that interest in a six-year tour in the Navy as part of thenuclear power program.

“I had two years of schooling beforegoing out to the ship. It was rigorousright from the start,” says Paulson. Of84 people in his basic training company,42 were designated for the nuclearpower program. From those 42, onlyPaulson and three others completed theprogram.

He describes his responsibilities on

the nuclear-powered aircraft carrier as acombination plant operator, chemistand radiological controls technician.

Paulson was deployed to the PersianGulf for six months, providing supportto ensure safe travel of seagoing vesselsand conducting training exercises withother U.S. military branches and alliedforces.

After six years in the Navy, he usedthe GI Bill to earn a degree in chemicalengineering from Montana StateUniversity.

Today he’s a process engineer at theCHS Laurel, Mont., refinery, where heworks on control systems andautomation, ensuring electronics workcorrectly.

“The military is process oriented.What you do affects 6,000 people in themiddle of the ocean. That gives you themindset and framework to build a pro-cess and complete a task,” Paulson says.

He adds that hiring veterans bringsreal-world, real-work experience to theworkplace.

To view a video with Mike Tangen,visit: www.chsinc.com/c. ■

The pressure tanks and semi tractorslined up outside the CHSTransportation shop in Minot, N.D.,would be dwarfed by the B52bombers and other support equipmentBen Tudor maintained during his 22years in the U.S. Air Force.

“Our job was to keep planes in theair. Our unit was very technical,” saysTudor. Over his military career, heworked his way up to serving as atraining manager and later adeployment manager for hissquadron, where he oversaw 400 AirForce personnel.

When Tudor retired last year, hechose to stay near Minot. “Most guysI know who are retiring out of themilitary are looking for stability andopportunities to grow,” says Tudor,

who saw the opportunity with CHSTransportation to get back to his rootsand “wrench on equipment.”

“There’s a lot of predictability inwhat you do in the military, but thereare also a lot of challenges andopportunities. We were alwayslooking for ways to improveprocesses and approach problemsdifferently. That carries over to anyjob,” says Tudor.

During his military career, Tudorspent one year in Korea andcompleted three four-month tours inSaudi Arabia. “After more than 20years, you take a lot from your militaryexperience. Seeing how people inother countries live changes yourperspective.” ■

Putting skills to work


We met at a bed and breakfast in the Badlands of NorthDakota. This was Teddy Roosevelt country, not far from hisformer ranch site. It is rough country where the summermonths are often hot and very dry. Our subject wascooperative development: where was it headed after the

decade of the 1990s and “co-op fever” which had swept through Minnesotaand North Dakota, with some spin off in South Dakota as well.

Although it was 13 years ago, I still remember the feelings engenderedas we sought to understand what was coming for those of us who make aliving starting cooperatives. In reflection, we were somewhat prophetic. I

Remembering the ‘Badlands’ Report

By Bill Patrie, Executive DirectorCommon Enterprise DevelopmentCorporation, Mandan, N.D. e-mail: [email protected]


PreambleAs individuals who work with, study

or write about cooperatives, we reportour thinking about cooperativeenterprises in North America. We metfor two days in the Badlands of NorthDakota. While we make no claims tounique insights, we did want to shareour reflections and discussions about

the issues that impact cooperatives. Wehope you find our thoughts useful. LoriCapouch, Susan Davis, Lee Egerstrom,Wally Goulet, Roger Herman, JulieHogeland, Audrey Malan, William Nelson,Steve Noack, Bill Patrie and Judy Ziewacz

DisclaimerThis report reflects a spectrum of

thoughts from developers, teachers,researchers, government officials,media, lawyers and cooperativeemployees. None of the ideas presentedhere should be attributed to anyindividual. We are presentingstatements in this report without therequirement of unanimous agreement.These thoughts reflect an emphasis on

President Teddy Roosevelt said the Badlands of North Dakota “restored his soul.” The remarkablelandscape also helped inspire a group of co-op “thinkers” in 2001, when they gathered to discusssome of the major questions about co-op development. Photo courtesy North Dakota Tourism Office

don’t know if all prophets suggest that bad things are about to happen ifways aren’t changed — but we certainly felt that way. And some of thosebad things did happen.

We thought that the industrial age would give way to theinformation age, but it looks like we now have both. And agriculture isboth getting bigger as a response to the industrial age, and getting waysmaller as a response to the information age.

In 2001, we thought the environmental ethic would become a muchmore powerful force than it is in 2014. The Badlands of North Dakotahave the Bakken and Three Forks oil formation under them. The faultlines between conservation and oil production are now clearly drawn.

We thought leadership would emerge in the cooperative communitythat would take us cooperators to a better place. Perhaps the change wewere looking for was us — and that didn’t turn out exactly the way wehad hoped either. The inability of leaders to “see over the horizon”turned out to be as bad as we thought, and we still long for those folkswho can tell us the location of the cooperative promised land.

Perhaps we need to listen to new voices who are describing the“cooperative economy” from Jackson, Miss., and the voice of thecooperative movement’s favorite prophet, Gar Alperovitz, who answersthe question “what then must we do?”

Teddy Roosevelt said that the Badlands restored his soul, and I havefound that same beneficial effect for myself. There is something so bigand empty about this place that it minimizes personal problems. It is agood place to go to think about big subjects, and I think it contributedto the insights that were shared in 2001.

I hope this reflection on a 13-year-old report can be a stimulus tonew thinking for those of us who care deeply about the cooperativemovement. How do we get together again and answer Gar’s question?

Thoughts About Co-ops in North America


rural or agriculturally based existingtraditional cooperatives and newgeneration cooperatives, because of thebackground familiarity of theparticipants.

This report follows the sequence ofthe actual dialog that occurred, startingwith opening lamentations and endingwith consoling realities and reasons forhope.

We lamented1. Complete vertical integration is

too hard and often fails. Starting anew generation cooperative — one thatis completely vertically integrated fromthe production of the commodity to thefinal sale of the finished product — isvery hard. Most of these startups arenot successful. Very few cooperativescan master all of these essential steps.Achieving competent management andadequate capitalization seemsoverwhelming.

2. Some existing cooperativesseem interested in servingthemselves first. Existing cooperativesseem to turn a deaf ear to newcooperatives, appearing to be interestedin achieving what is good for thecooperative, rather than what is goodfor the members.

3. Existing cooperatives arefocused on getting through the day(no long views). Cooperative leadersdon’t have the luxury of thinking aboutthe long-term destination of themovement. Visionary leaders have diedor retired, visionary institutions havemerged or consolidated, memberservices positions have been eliminatedto save money and cooperatives arefocused on getting through the day.

4. Losing track of our members.We realized that we no longer reallyknow our members. We don’t knowwho they are or what they want.

5. We have become reactionaryrather than creative. Instead oflooking for opportunities, we arefighting off enemies, trying to defendour territories and markets instead oflooking for new ways to provide

meaningful benefits to existing and newmembers.

6. Losing track of social capital.One of the assets important tocooperatives is social capital. Wedefined social capital as a community-or society-held common understanding,favorable attitude and/or commitmentto cooperation and cooperativeorganizations. We noted thatcooperatives once meant something toour communities. We were new andexciting, and we were mainstays in thecommunity. We built good will and weacted differently than our competitors.We don’t have a place on our balancesheets for social capital, but we feel as ifwe are losing it. The loss of socialcapital is reflected in decreasingemployee commitment, member loyaltyand community affection. We know ithas real value to a business cooperative,we are unsure about how to build andaccount for it. (See end note (a) for moresources of information on social capital.)

7. Our member benefits havebecome obscure. The reasons to joinour cooperatives used to be clear andthe benefits transparent. Now they arehard to see. Phone service or electronsare often purchased only on price; so,too, with the selling of grain or thebuying of inputs — it’s who has the bestdeal. No one worries what the costwould be if the cooperative were notthere. The existence of the cooperative

is taken for granted. “What have youdone for me lately?” is often asked.

8. Members are not meeting theirresponsibilities. Without a crisis orextreme door prizes, members don’tseem interested in their civic anddemocratic responsibilities.Management expects less, and lesscommitment from members, andmembers respond with less and lessparticipation. Don’t ask for much fromthe members; they will just as likelypatronize a competitor. They for surewon’t sacrifice for the cooperative.Have cooperatives become latentdemocracies?

9. Speculators, price takers andbuilders. Some new generationcooperatives are experiencingspeculators who buy shares but neverintend to produce the product. Theyrely on the cooperative to purchasecommodities on their behalf through a“pool.” The value of their investment isonly measured in dividends paid sincethat most directly influences sharevalue. Other members only care aboutthe price they receive at delivery, tryingto force the cooperative to pay higherand higher prices without considerationfor maintaining operating margins.

The third category are thosemembers who raise quality productsand deliver them to the cooperative forprocessing and understand that the truevalue that will be paid to them is whatthe cooperative can sell the finishedproduct for after deducting theoperating costs. These members will“build the business” by investing andwait until final operating margins areknown before demanding dividendpayments. If either the price takers orthe speculators gain operating controlof the cooperative, it may becomeimpossible to manage and may fail. (Seeend note (b) for more discussion on thissubject.)

10. Too small a cadre of principaladvisors. Cooperatives have looked foradvice primarily from agriculturaleconomists. While this advice is neededand useful, it has not been adequate to

This meeting room, with its panoramic viewof the Badlands near Medora, N.D., is wherethe brain storming sessions occurred for theBadlands Report. Photo courtesy Eagle RidgeLodge. Opposite page: Hiking in the Badlands.Photo courtesy North Dakota Tourism Office


fully utilize the social, spiritual andpsychological value of cooperation.

11. Aging of members andleaders. We’re mourning the loss ofvisionary co-op leaders. Once thefounders of great cooperatives sacrificedand struggled to provide services andstart the enterprises. Now some

members have become parasitical,believing that the cooperative is a goodplace to get “perks” if you become adirector. Instead of seeking the office tolead and “carpe diem” (seize the day),some members seek to becomedirectors to “carpe per diem” (seize thebenefits).

12. The world paints allcooperatives with the same brush.There is a vast difference incooperatives and their operatingstrategies. There are importantdifferences between economic sectors.All cooperatives are not the same, yetnegative images seem to catch manygood cooperatives in the same net asthe bad ones.

13. Cooperatives too often seek tofight with their competitors’weapons. We are often asked to fightour competitors with their weapons —such as economies of scale and size, andrequiring more and more benefits atlower and lower prices. Uncomfortablein this new armor, we have lost our

swiftness of foot and our ability toconnect with our members in deeplymeaningful ways.

14. We try to define ourselves assomething separate — as the fourthsector after government, nonprofitand private business. Our difference isnot in our organizational structure, but

in how we behave. We cooperate, andwe can do that as government, or as anonprofit, or as any one of the businessforms available in North America.Being legally organized as a cooperativedoes not ensure our uniqueness. Wewant to examine, instead, how theorganization behaves — does itcooperate?

15. We are not diverse.Homogenous boards encourage easyconsensus, but they do not create thehigh-bred vigor of diverse thought andinput. Our organizations are not self-challenging, bring narrow perspectivesand are not using the strength ofdiverse membership.

16. Agency theory problems seemto overwhelm us. We all agreed thatcooperatives are “agents” for theirmembers and are designed to providebenefits to those who “patronize” thecooperative. However, numerousproblems continue to plague this formof business organization. They include:• “Free riders” who have not made the

sacrifice or the investment continue toget the benefit of cooperativeenterprises.• Horizon problems startle us when thenew generation cannot appreciate thesacrifice of the founding generation andwill leave the cooperative for little or noreason.• Portfolio problems, such as trying tomanage hog operations and dairyoperations at the same time, over-burden leadership and management,leading to complaints among themembership.• Control by members is lost as thecooperative becomes so large and sodistant that members no longer knowwhat the cooperative is or why theyshould care.• Decision-making takes place bydirectors and managers who areunevenly influenced by members. Allmembers and all directors are not thesame — some members’ and somedirectors’ opinions matter more thanothers do, usually because they do largevolumes of business with thecooperative. Do you really want to loseyour largest buyer? (See end note (c) formore information on agency theoryproblems.)

Consoling realities and some reasons for hope

We began to enjoy theselamentations. We had reasons to feelmiserable and unappreciated. Our greatleaders had died or retired, our favoritecooperatives are operating as uninspiredimitations of competitors and we haddifficulty in naming CEOs who met ourdefinition of heroes. Even though weenjoyed this self-pity, participants beganto call us back to a more positive andaccurate vision of reality and createdreasons for hope. We did not attempt toanswer our lamentations on a point-by-point basis. We agreed that futuremeetings could more thoroughly buildantidotes to the problems we identified.But we knew that the reality was not asdark as the picture we had just painted.Those consoling realities included:

1. New leaders: Our old leaders are


being replaced, not by well-knownnames, but by skilled and visionaryleaders, nonetheless. While havinghumble beginnings, these leaders havefought and won many battles. Whilenot yet ready for the highest levels ofleadership, they truly understand theirown skills. They will volunteer to lead.

2. Learned lessons: We understoodthat we now have a new resource to callupon. Some in the group called itmaturity, others preferred to call itwisdom. We have unique knowledgeand experience. We now need tocapture that wisdom and translate itinto our daily work. We need to notonly teach others how successful newgeneration cooperatives got started, butalso the lessons they have learned asoperating companies. Thesecooperatives have operating history andcan be asked, “What would you dodifferently?”

3. The new economy valuescooperation: We understood that thenew economy values cooperation.Authentic concern for humankind onceagain provides cooperatives theopportunity to make a meaningfuldifference in the lives of our members.

4. Seeing the forest and the trees:We understood that we are capable ofholding long-range views about thefuture of cooperatives and managing toget through the day, at the same time.We could cite examples of suchcooperatives.

5. Knowing the force of change:We realized that the transition from theold industrial economy to the newinformation-based economy createsforces that will buffet us as humanbeings. The desire to stay the samecollides with the demand for change,and we personally feel the turbulence.Knowing that there will be turbulencehelps prepare for it.

6. Electronic communication: Awonderful characteristic of the neweconomy and the information age is theability to communicate electronicallyand understand consumer preference innew ways. We can get closer to our

members and customers, and we canknow them better because of thistechnology.

7. The courage to break ranks:Agriculture, we decided, is much like acolumn of soldiers marching left/right,left/right on a weakened bridge. Whenall the weight of the column hits at thesame time, it will collapse the bridge.The wise leader orders, “Break ranks!”Agriculture needs to break ranks.Farmers can’t just keep pounding outcommodities in lock step. The lock stepproduction of commodities is collapsingthe system. Farmers and ranchers canbreak ranks, but it takes intelligence todo so without going broke. Theinformation age now allows us to gatherand apply that intelligence prior toleaping into new ventures.

8. The new model: Uniformity,conformity and standardization areparts of the mechanical process of theindustrial age. Many cooperatives stilluse these operating strategies. Somecooperatives are trying to gainoperating efficiencies by mergers. Mostcooperatives are trying to reduce costsand standardize. While many of thesetactics may be appropriate forinstitutional survival, they may not beadequate to build the organizations wedesire.

The new economy and theinformation age acknowledge thathumans have always been biologicalcreatures. The biological model ofhuman behavior encourages diversityand specialization instead of machine-like standardization. As it is inagriculture, organizational diversity incooperatives is a strength. While thegrip of the old way is strong, the pull ofthe new economy toward a new modelis a reason for hope.

9. Surviving the transition: In-dividuals working for cooperativeorganizations need to be aware of thepowerful influence of the industrial age.Few organizations can instantlytransition to the information age.North America is not completely in thenew economy. Organizations going

through these changes experienceinternal anxieties. Within cooperativeorganizations, well-meaning andforward-looking individuals can bewrongly perceived as a threat underthese circumstances. We have reason tohope because we can understand thistype of organizational behavior and canusually avoid negative consequences.

10. Faith in the future: Eventhough many cooperative institutionsare struggling with the change from theindustrial age to the new economy, theyare moving. The direction of thatmovement is toward more responsive,diversified and meaningfulorganizations. Cooperatives have theability to break ranks more easily thanother forms of business ventures. Manyexisting cooperatives were formedbecause traditional systems failed toprovide the desired benefits.

Designing new cooperatives, forgingnew alliances and redesigning existingcooperatives are all possible in thepositive view of the future commonlyheld by cooperators. Much has alreadybeen done, and though the road will bedifficult, it is a journey well worthtaking. It is a reason for hope.

A one-time reportWe left the meeting without any

formal plans to meet again. We weregenerally satisfied that for these severaldays we were able to reflect on issues atgreater depth than possible in ourprofessional lives. Individuals in thegroup expressed willingness toparticipate in similar discussions in thefuture. ■

End notes• See Measuring Social Capital in Five Communities

in NSW by Paul Bullen and Jenny Onyx at:http://www.mapl. com.au/A2.htm.

• See A Cooperative Approach to Local EconomicDevelopment, edited by Christopher D. Merrettand Norman Walzer, published by QuorumBooks 2001, Chapter 11.

• New Generation Cooperatives in the NewMillennium by Doeke Faber and Lee Egerstrom(What NGC’s Cannot Do and False Hopes andExpectations) Pages 179, 180, 181.

• Ibid (Agency Theory Problems) Pages 178 and179.



NewslineSend co-op news items to: [email protected]

Co-op developments, coast to coast

Two co-ops share wind energy honors

The National Rural ElectricCooperative Assoc. (NRECA) and U.S.Department of Energy have awardedtop honors for wind energy productionto Old Dominion Electric Cooperativeof Virginia (ODEC) and the RuralElectric Convenience Cooperative ofIllinois (RECC).

The cooperatives were recognizedMarch 6 as the 2013 WindCooperatives of the Year atthe TechAdvantage 2014 Conferenceand Expo in Nashville, Tenn. Co-opexecutives said they appreciated thehonor for outstanding leadership inadvancing U.S. wind power andacknowledged what the award meansfor wind energy going forward.

RECC worked with the IllinoisDepartment of Natural Resources toinstall the utility-scale wind turbine onan elevated section of an abandonedmine to capture a large amount of windto serve its 5,800 member-consumers.ODEC, a wholesale power supply co-op, has added more than 260 megawattsof capacity to its renewable resourceportfolio since 2008 to serve its 11member distribution co-ops.

A panel of judges from the windindustry, utilities, government, nationallaboratories and cooperatives picked thetwo co-ops based on their corporateleadership, project innovation, andbenefits to customers.

AMPI reports $1.8 billion in sales

Associated Milk Producers Inc.(AMPI) had sales of $1.8 billion andearnings of $7.5 million in 2013, it was

Old Dominion Electric Cooperative in Virginia and Rural Electric Convenience Cooperative(RECC) in Illinois shared honors as Wind Cooperative of the Year. Top: The GobNob WindFarm in central Illinois. Photo courtesy RECC. Below: The Mehoopany Wind Farm inWyoming County, Pennsylvania. Photo courtesy BP Wind Energy


Agriculture Secretary Tom Vilsack inlate April announced that USDA will beproviding additional support andresources for America’s small and mid-sized farmers and ranchers and for co-op development. “Small and mid-sizedproducers are a vital part of America’sagricultural future, and we arededicated to ensuring their success,”Vilsack said. “USDA is continuallyreviewing our resources, programs andpolicies to make sure we are workingfor producers of all sizes.”

Efforts announced by Vilsackinclude: ■ The Rural Cooperative DevelopmentGrant Program (RCDG) will make up to$5.8 million available to Rural

Cooperative Development Centers(RCDCs), which, in turn, providetechnical assistance focused onimproving the economic condition ofrural areas by supporting the start-up,expansion or operational improvementof rural cooperatives and otherbusiness entities. Cooperatives haveoften been the mechanism used byproducers to work together to accessnew markets or market value addedproducts. ■ In 2013, business and cooperative

funding through the CooperativePrograms office of USDA RuralDevelopment helped 17,773 ruralbusinesses, including 4,200 farmersand 4,472 small businesses. Theseinvestments created or saved morethan 41,600 jobs. Under the 2014 FarmBill, USDA will be creating anInteragency Working Group to improvecoordination of programs and servicesbetween federal agencies and nationaland local cooperatives through theRCDG program. ■ $7 million in grants are beingawarded to 10 universities to developprograms that will help small andmedium-sized farmers grow theiroperations, enhance their production

and become economically viable.These awards, made by USDA’sNational Institute of Food andAgriculture (NIFA) Agriculture andFood Research Initiative (AFRI) Smalland Medium-Sized Farms program,focus on developing models to assistsmall farmers develop managementstrategies, adopt new technologies andimprove their competitiveness. Theseawards prioritize strategies thatenhance access to markets, developlocal and regional food systems,

assess the impact of economicchanges to new and beginningfarmers, and conduct outreachactivities that may enhance smallfarmers’ well-being.■ The Small, Socially DisadvantagedProducer Grant program (SSDPG) willmake $3 million available to providetechnical assistance to small, sociallydisadvantaged agricultural producersthrough eligible cooperatives andcooperative development centers.Awardees will be able to conductmarket research, product and/orservice improvement, feasibilitystudies, and training, and implementbusiness plans. Applications are beingaccepted through June 30, 2014. Moreinformation about how to apply is onthe Rural Development website. ■ USDA Certification for Small andVery Small Producers of grass-fed beefis a new verification programadministered by USDA’s AgriculturalMarketing Service (AMS). It is tailoredto meet the needs of small-scalelivestock producers and the growinggrass-fed beef industry. It allows small-and very small-scale producers tocertify that their animals meet therequirements of the grass-fedmarketing claim standard, helping themdifferentiate themselves andcommunicate value to their customers.AMS is targeting producers thatmarket 49 cattle or less each year bydesigning a less costly applicationprocess for these producers to use theUSDA Certified Grass-Fed claim.Producers who are certified under thenew program will receive certificatesthat allow them to market cattle toslaughter facilities as USDA certifiedgrass-fed, increasing their marketvalue and creating new economicopportunities throughout the supplychain.

For more information on theseprograms, visit: www.usda.gov ■

USDA supports co-op development, small- and mid-sized farmers US

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announced in Bloomington, Minn.,during the annual meeting of the 2,600-member co-op. “Our manufacturingcapacity and production flexibility madeit possible for AMPI to reap thebenefits of increased demand for ourcore product line — cheese, butter andpowdered dairy products,” AMPIPresident and CEO Ed Welch toldsome 400 members, employees andguests at the meeting. “Coupled withplant improvements, the cooperative’sperformance improved and the balancesheet was strengthened.”

American-style cheese production of400 million pounds in 2013 remains thecooperative’s top product category.AMPI was also a Midwest leader inmilk powder production. Products suchas nonfat dry milk, whey proteinconcentrate and lactose were sold todomestic and global customers asdemand for milk proteins increasedworldwide.

Cheese and butter packaged forconsumers at the cooperative’smanufacturing plants grew once again.Cheese sales increased 7 percent, whilebutter sales rose for the eighthconsecutive year, posting a 3 percentgain. Nearly 70 percent of AMPI’sconsumer-packaged business is sold tofoodservice customers.

AMPI Board Chairman SteveSchlangen reviewed the steps taken inthe past year to position the cooperativefor strategic growth. “Throughcarefully considered moves made atevery level of our cow-to-consumerbusiness, we made great progress in2013,” he said. “This was done byfocusing on a core product line andtaking an active role in reforming dairypolicy that provides meaningful optionsfor reducing price risk.”

Additional AMPI 2013 highlightsinclude:• 5.8 billion pounds of milk was

marketed through 10 manufacturingplants;

• 2,600 AMPI dairy farmer-ownersshared $10 million in equity payments;

• Export markets accounted for 23percent of AMPI powder sales,primarily to Mexico.

China’s decision to lift its seven-year ban on poultry imports fromVirginia has the potential to create a$20 million boost in poultry sales tothe fast-growing Chinese market,according to Southern StatesCooperative, Richmond, Va. The banwas prompted in 2007 by an isolatedcase of a mild strain of avian fludiscovered at a single ShenandoahValley farm. “No one expected theChinese action to last as long as ithas,” the co-op said in recentannouncement.

Poultry production is the singlelargest segment of agriculture in thecommonwealth of Virginia, with 2013

exports topping $186 million.Southern States has more than 3,000Virginia poultry producer-members.

“We are gratified to see the endof this ban and the increased marketpotential China offers for ourproducers,” says Turner Gravitt,Southern States’ director ofgovernment affairs, adding that theco-op “greatly appreciates theefforts” of state government andfederal officials to help end the ban.

Southern States is a farm supplyand service cooperative, founded in1923, which now has more than200,000 farmer-members. ■

Southern States hails lifting ofChinese ban on Virginia poultry

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• A Parmesan cheese wheel produced atAMPI’s Hoven, S.D., plant wasnamed best Italian cheese entry at the2013 National Milk ProducersFederation Championship CheeseContest.

Farmer Co-op Conference Nov. 6-7

The 2014 Farmer CooperativeConference (FCC) will be held Nov. 6-7 in Minneapolis, Minn. The 17thannual FCC is being organized by theUniversity of Wisconsin Center forCooperatives to provide a forum forcooperative directors, managers andthose doing business with agriculturalcooperatives to address issues currentlyaffecting the agricultural cooperativecommunity.

This year’s program will focus oneconomic trends, policy developmentsand what it will take to sustain and leadyour cooperative into the future. Formore information, contact: AnneReynolds at: [email protected]

USDA investing $78 millionfor local food enterprises

Agriculture Secretary Tom Vilsackannounced May 8 that USDA is makinga historic, $78 million investment inlocal and regional food systems,including food hubs, farmers markets,aggregation and processing facilities,distribution services and other localfood business enterprises.

“The 2014 Farm Bill has givenUSDA new tools, resources andauthority to support the ruraleconomy,” Vilsack said. “Consumerdemand for locally produced food isstrong and growing, and farmers andranchers are positioning theirbusinesses to meet that demand. As thissector continues to mature, we seeaggregation, processing, anddistribution enterprises across the localfood supply chain growing rapidly.These historic USDA investments insupport of local food give farmers andranchers more market opportunities,provide consumers with more choicesand create jobs in both rural and urbancommunities.”

Vilsack said that $48 million in loanguarantees for local food projects isnow available through the Business andIndustry Guaranteed Loan Program,administered by USDA RuralDevelopment. Another $30 million isavailable through competitive grantsfrom the Agricultural MarketingService’s (AMS) Farmers Market andLocal Foods Promotion Program.The 2014 Farm Bill requires USDA toset aside at least 5 percent of Businessand Industry (B&I) program loanguarantees for projects that focus onlocal food business enterprises. Detailson how to apply for local food fundingthrough the B&I program are availableon the Rural Development website:www.rurdev.usda.gov.

Applications are accepted on arolling basis. The B&I program has theauthority to fund local foodinfrastructure in urban areas as long asthe project supports farm and ranchincome and expands healthy food accessin underserved communities.

Rural Development’s B&I programprovides financial backing for ruralbusiness development in partnershipwith private-sector lenders. It is one ofseveral USDA programs that helpfinance local foods projects. In 2013,Rural Development supported morethan 170 local food infrastructureprojects, including food hubs, scale-appropriate processing facilities, coldstorage and distribution networks.Entities eligible for B&I loanguarantees include cooperatives,nonprofit organizations, corporations,partnerships or other legal entities,Indian tribes, public bodies orindividuals.

The 2014 Farm Bill tripled fundingfor marketing and promotion supportfor local food enterprises by creatingthe Farmers Market and Local FoodsPromotion Program, administered bythe Agricultural Marketing Service.This new program makes $30 millionavailable annually to farmers markets,other direct producer-to-consumervenues, and other businesses in the localfood supply chain. Under this program,$15 million is now available for

marketing and promotional supportspecifically for local food businesses,including food hubs, delivery andaggregation businesses, and processingand storage facilities along the localfood supply chain, while $15 million isfor marketing support for farmersmarkets and other direct to consumeroutlets.

Since 2009, AMS, which administersthis program, has provided $27 millionfor nearly 450 projects to support directmarketing efforts for local food. Moreinformation about how to apply isavailable on the AMS website:www.AMS.usda.gov. Applications aredue June 20, 2014.

CDF grant helps in typhoon recovery

The Cooperative DevelopmentFoundation’s (CDF) board has approveda grant of $20,000 to the InternationalCooperative Alliance (ICA) to be usedto help co-ops and members recoverfrom Typhoon Haiyan in thePhilippines and Southeast Asia. TheNational Confederation ofCooperatives in the Philippinesreported that at least 350,000cooperative members had been affectedby the typhoon.

Dame Pauline Green, president ofthe International Cooperative Alliance,issued an appeal for donations for co-oprecovery in the Philippines. RobynnShrader, CEO of the NationalCooperative Grocers Association, askedthat CDF accept donations made forthis appeal and forward them to theICA. “When tragedies like Haiyanoccur, it is heartening to see thecooperative community come togetherand show the true spirit of ourmovement, which is that together weare stronger and more effectivetogether than alone,” said Shrader.“Recovery has been slow in the wake ofHaiyan, and these monies will be atremendous help in the re-buildingeffort.”

CDF’s Co-op Disaster RecoveryFund helps co-ops and their membersrecover from disasters and promotes co-op enterprise in recovering areas. The

grant was made possible by a $10,000donation from the National Coop-erative Grocers Association as well ascontributions from food co-ops andcooperators around the country.

USDA supporting food hub development

USDA’s Agricultural MarketingService has entered into a cooperativeagreement with FamilyFarmed.org todevelop a national guide on “BuildingSuccessful Food Hubs.” Theannouncement was made during theNational Good Food Network’s 2014Food Hub Collaboration Conference inRaleigh, N.C.

The new national planning guidewill include descriptions of keyfunctions, best practices and provenstrategies for food hubs — all based onsuccessful models operating across theUnited States. The number of foodhubs has risen by 65 percent since2009, with more than 230 food hubsnow operating around the country. Onaverage, each food hub supports 20 jobsand generates nearly $4 million inannual sales.

The nonprofit FamilyFarmed.org,based in Chicago, is committed toexpanding the production, marketingand distribution of locally grown andresponsibly produced food. The guide,“Building Successful Food Hubs,” willbe one of several valuable tools USDAhas developed to help establish,enhance or expand food hubs.

“Food hubs are helping producers ofall sizes grow, which in turn supportsthe economic health and well-being ofrural communities,” said conferencespeaker Doug O’Brien, acting undersecretary for USDA RuralDevelopment. “USDA is a proudsupporter of food hubs because weknow they help build stronger regionalfood systems.”

O’Brien noted that USDA RuralDevelopment provided support tomore than 150 local food infrastructureprojects in 2013, including food hubs,scale-appropriate processing facilities,cold storage and distribution networks.He said that USDA set new goals this

year to fund local food projects andhelp people in the local foodscommunity work with and accessUSDA programs, such as USDA RuralDevelopment’s Value-Added ProducerGrants, Business and Industry LoanGuarantees and Community FacilitiesLoans and Grants.

The conference brings togetherpeople and resources dedicated tosupporting the diverse aspects of foodhubs and regional food systems. Withincreasing demand for fresh, localfoods, food hubs aggregate productsfrom small and mid-size farms so thatlarge-volume buyers, such as grocerystores, can buy local foods from familyfarms in the region.

Additional USDA research,

information and findings about foodhubs is available at:www.ams.usda.gov/foodhubs.

DFA sales hit $12.8 billionDairy Farmers of America ended the

year with strong operating results fromits wholly owned commercialinvestments and increased earningsfrom affiliates. The cooperative’sadjusted net income was $61.3 million,while net sales reached $12.8 billion for

2013, a 6 percent increase compared to2012.

“At DFA, we’re about making sureour members can farm successfully andprofitably,” says Rick Smith, presidentand chief executive officer. “In 2013, wehad a successful year. Through strongoperational performance and jointventure returns, we were able to executeon our strategic plan. We are alsopleased with the improved margins formembers.”

In 2013, DFA directed the marketingof 60.6 billion pounds of milk for bothmembers and others through itsconsolidated businesses and relatedaffiliates. This represents about 30percent of the total milk production inthe United States. Payments tomembers for milk marketed were $7.9billion in 2013, compared to $7.3billion in 2012. This increase isprimarily a result of the higher U.S.annual average all-milk price, whichaveraged $20.01 per hundredweight.

Returns to members in 2013 totaled$41.9 million, with $23.3 milliondistributed from the cooperative’sallocated patronage and $18.6 millionthrough DFA’s various capitalretirement programs.

DFA continued to grow itscommercial investments in 2013. TheCooperative’s Fluid Milk and Ice CreamDivision acquired Frederick, Md.-basedDairy Maid Dairy — a processor ofmilk, juice and fruit drinks that marketsto major grocery chains, schools, andgovernmental entities such as militaryinstallations.

The Ingredients Division alsocontinued to expand, with a focus onexport opportunities with globalcustomers in strategic markets. DFAexported 222 million pounds of productin 2013, for a fourth consecutive year ofrecord export sales.

In 2013, DFA broke ground on twonew plants. On Sept. 20, ground-breaking was conducted in Linwood,N.Y., for a new cold-process milkseparation plant. The plant, which isscheduled to be completed later in2014, will produce cream and skim milkfor a range of regional customers. A


Food hubs, such Eastern Market in (Michiganabove), should benefit from a new guide,“Building Successful Food Hubs,” developedwith support from USDA.

second dairy ingredient plant iscurrently under construction in CassCity, Mich., which will produce high-quality condensed whole and skim milkand cream.

Earnings of affiliates were $72.8million in 2013 compared to $57.6million in 2012. Cash distributionsfrom DFA affiliates totaled $38 millionin 2013 compared to $36.4 million in2012.

Dakota food co-opfinds strong support

Leaders of the BisMan CommunityFood Co-op (BCFC), a start-up retailfood cooperative in Bismarck, N.D.,recently met with representatives fromBasin Electric Cooperative to discusshow the organizations could supporteach other as cooperatives.

By the meeting’s end, Basin Electrichad agreed to contribute $50 towardevery membership purchased by a BasinElectric employee. That means a Basinemployees could invest as a member-owner of BCFC for $150 and Basin willcontribute the rest. Since the program’slaunch in late February 2014, theBCFC has seen its membership soarfrom 350 to nearly 500 in early May.The initial goal was 600 members,increasing to 1,000 by the time thestore is ready to open.

This strong early showing of supportfor the co-op proves that “the localfood and cooperative movement is aliveand well in North Dakota!” says co-opleader Heidi Demars.

Stakeholders from BCFC and BasinElectric discussed how the food co-op’sboard of directors, founding members,and volunteers are standing where othercooperative pioneers in North Dakotastood many years ago, when co-opswere the only way electricity could bebrought to the countryside.

BCFC founding members arebanding together to achieve access tohealthier, fresher, local food and tosupport local farmers who make NorthDakota their home, Demars notes.BCFC founding members want to bepart of a strong local economy and toempower members to know where their

food comes from, and to support ademocratically controlled business thatis governed by its member-owners.

MMPA sales nearing $1 billion Michigan Milk Producers Assoc.

(MMPA) had $957 million in revenuefor 2013, indicating that the co-op is“clearly on track to reach the $1 billionmark for the first time,” GeneralManager Clay Galarneau told delegatesat the co-op’s 98th annual meeting inMarch. It was the second consecutiveyear that MMPA’s milk supply increasedby nearly 5 percent, and Galarneau sayshe expects to see another 5-percentincrease in milk volume for 2014.

Members are thus seeing a goodreturn on the $62 million invested in2010 for a major expansion of MMPA’sOvid processing plant. “In the first fouryears of operation, this investment hasrealized over $23.7 million, or a returnof 15 cents per hundredweight for ourmembers,” he said.

Most of MMPA’s increase milkvolume is going to export markets, suchas China and Mexico, where demandfor infant formula ingredients has beengrowing rapidly. Last year, the co-opsaw the export volume of nonfatpowder increase by 427 percent fromthe 2012 level, representing 5.7 of itstotal production.


Registrations are now beingaccepted for the 2014 ACE Institutein Austin, Texas, July 13-16. Thegathering of co-op educators anddevelopers will explore cooperativeeducation resources and researchand development projects that aretransforming people, cooperativesand communities across NorthAmerica.

Among the areas of focus will bea look at communities that arecreating a systematic approach tocooperative development, as well asefforts to develop a new co-opcurriculum for youth. Among the

other topics will be: • Laying the Foundation for Co-op

Education: Inform, Train, Educate; • Living the Cooperative Values

Within Your Organization;• The State of Co-op Business

Education;• Collective Courage: A History of

African-American CooperativeEconomic Thought and Practice.

To register and see thepreliminary program agenda, visit:http://s.coop/ustin. For questions,contact Sarah Pike at: (763) 432-2032.■

Transformative power of co-opsto be focus of ACE in Austin

Heidi Demars waits to sign up anothermember for the BisMan Community Food Co-op, which is nearing the goal of 600 membersneeded to launch the co-op in Bismarck, N.D.The event here is an annual health fairsponsored by Basin Electric Cooperative,which is contributing to the membership feespaid by employees who join the food co-op.Photo courtesy Basin Electric

“Butter exports were nearly asimpressive, showing an increase of 176percent for 2012, or nearly 24 percentof production,” Galarneau said. “It isclear that Michigan has been, andcontinues to be, a growing dairy state,”he added, noting that since 2000, thestate has seen its annual milkproduction increase from 5.7 billion to9.1 billion pounds.

MMPA members received an “all-milk average price of $20.35 perhundredweight for 2013, above thenational average of $20.01 (as estimatedby USDA),” Galarneau said, addingthat the co-op sees the potential for arecord average price of $23 perhundredweight for 2014.

MMPA made cash payments of $3.8million in equity retirements in April.These cash payments represent theretirement of the 2005 equities. This isin addition to the $2 million in cashpatronage from 2013 earnings paid tomembers earlier this year.

“We continue to revolve equity backto our members on a nine-year cycle,

an impressive accomplishment for anycooperative,” says Galarneau. Duringfiscal year 2013, MMPA membersearned $26 million in total premiums.

Turkish delegates studying U.S. co-ops

In what marked the first officialcooperative-to-cooperative visitbetween the United States and Turkey,representatives from the Ankara-basedMinistry of Customs and Trade GeneralDirectorate of Cooperatives recentlymet with NCBA CLUSA officials inWashington, D.C. The visitunderscored a movement towardgreater collaboration between theglobal cooperative community and theUnited States as a leader in thecooperative development sphere.

“We are here to evaluate the well-established U.S. cooperative system,discuss future collaboration and hearsuccess stories,” said Ismail Kalender,general director of Turkey’s Ministry ofCustoms and Trade. “Until now, wehave only studied the cooperative

industry in the U.S. on paper.” The cooperative movement in

Turkey dates back to the republic’sfounding in 1923. There are currently84,000 co-ops in Turkey, spanning 30industries. Construction, agriculturaland transportation co-ops comprise thetop co-op industries, but there arevirtually no consumer co-ops. About 10percent of the country’s population —or 8 million people — are members ofco-ops. National laws in Turkey governhow co-ops are founded and dictateagricultural credits and sales.

Tom Decker, director of cooperativedevelopment for NCBA CLUSA, ledthe group through an overview ofcooperative development in the UnitedStates, from the birth of agriculture,finance and electric co-ops in the1920s-‘30s to a recent upswing inconsumer cooperatives as communitiesincreasingly value organic, farm-to-table food.

Decker also noted a trend towardcollaboration among co-ops in order tostrengthen their collective impact andbetter raise the profile of cooperatives.Co-ops, Decker said, are “on the cuspof major growth” in the coming years.

The Turkish delegation expressedkeen interest in worker co-ops. Apresentation by Leslie Mead, executivedirector of the CooperativeDevelopment Foundation, highlightedthe established benefits of organizinghome healthcare workers into workerco-ops.

NCB backing solar power projects

National Cooperative Bank (NCB)provided $82 million in financing forsolar projects during 2013. The bankworked with Strata Solar of ChapelHill, N.C., on 15 solar projects aroundNorth Carolina, which will generate 94megawatts of power, enough to supportthe energy needs of 11,250 homes.That power will also offset more than63,360 tons of carbon dioxideemissions, equivalent to reducing autotravel by 120 million miles, reducingthe carbon footprint by 11,700 cars.

All of the electricity generated will


This solar panel array at Fuquay Farms in Wake County, N.C., generates 9,600 megawatt hours ofelectricity per year, enough energy for 750 average homes. Photo courtesy National CooperativeBank

be purchased by subsidiaries of DukeEnergy. More than half of the solarprojects serve low- to moderate-incomerural communities.

These projects also have created newjobs. The co-op bank’s partner, StrataSolar, is committed to hiring andtraining a local workforce for long-termemployment opportunities. In 2013,Strata Solar tripled its workforce bycreating 1,200 new jobs. “Our strategyis to build our utility-scale projects inregional clusters, so that our teams

move from one job to the next creatingsustainable long-term job growth,” saysMarkus Wilhelm, CEO of Strata Solar.

Arkansas ag co-ops pursue merger

Farmers Supply Association (FSA)and Tri-County Farmers Association(TCFA) recently announced theplanned merger of their twocooperatives to create a new limitedliability corporation (LLC). Pendingmembership approval, the Arkansas

Farm Partners LLC would equallymerge the two companies to protect,strengthen and grow members’ equityinvestments for the future, the co-opssaid in an announcement.

The boards of directors of FSA andTCFA determined that pursuing thisnew business structure is in the bestinterest of the collective membership,which values the cooperative systemand its ability to serve their growingneeds.

“In recent years, we have seencooperatives sell to national companiesand eliminate the cooperative from thelocal market,” TCFA President TimSpector said. “We want to ensure thatour member-producers can continue todepend on the cooperative system thatthey value and trust to provide thehigh-quality, competitively pricedproducts and services that they havecome to expect.”

The merger would also create moreopportunities for growth and positionthe new LLC to lead the cooperativesystem in the state of Arkansas.

Farmers Supply Association, based inHarrisburg, is an ag supply cooperativethat has been working with farmers formore than 52 years in seven counties innortheast Arkansas.

With headquarters in Brinkley, Tri-County Farmers Association has servedits cooperative members for more than58 years in nine eastern Arkansascounties.

Oregon co-op markets GMO-free cherries

A new line of maraschino cherriesthat are certified to be free ofgenetically modified organisms (GMO)has been introduced by Oregon CherryGrowers, a Salem-based cherryprocessing cooperative. According to areport in the Statesman Journalnewspaper, the line of naturalmaraschinos has passed an independentverification process by the Non-GMOProject, a nonprofit organization thatperforms third-party verification andlabeling.

Oregon Cherry Growers is one ofthe largest processors of sweet cherries


The 2012 Census of Agriculture,released May 2, shows a nationwidedrop in land devoted to agriculturalproduction, from 922 million acres in2007 to less than 915 million acres,according to an announcement byAmerican Farmland Trust. Thisreduction continues a downwardtrend that has resulted in a 72-million-acre decrease of land inagriculture since 1982.

The census counts land devotedto cropland, woodland, pasture andrangeland, and farmsteads/farmbuildings, but does not trackchanges in rural land use, includingacres lost to development.

“This latest census continues thesteady decline of land in agriculturaluse as demand for agriculturalproducts grows worldwide,” saysAndrew McElwaine, president andCEO of AFT. “Globally, we face thechallenge of doubling foodproduction by 2050 to feed theworld’s population.”

States with the largestpercentage declines in land devotedto agriculture were: Kentucky, 6.7percent; Alaska, 5.4 percent;Georgia, 5.2 percent; Mississippi, 4.6percent; and Wisconsin, 4.1 percent.Increases in land in farms were

reported in 19 states. The largestpercentage gains were in: Maine, 7.9percent; Connecticut, 7.6 percent;Florida, 3.4 percent; Rhode Island, 2.6percent, and Virginia, 2.4 percent.But these upticks don’t tell the wholestory.

“In recent years, we’vedeveloped more than 50 acres ofagricultural land every hour,” saysMcElwaine. “Since 1982, we’veconverted 24.1 million acres – anarea the size of Indiana and RhodeIsland combined.”

Estimates from the latest NationalResources Inventory – a nationwidesurvey of non-federal landconducted by USDA’s NaturalResources Conservation Service –also show that every statedeveloped rural land and lostcropland soil to erosion between2007 and 2010. According to ananalysis by American FarmlandTrust, each of the 19 states withmore land in farms in the 2012census also developed significantacres of rural land.

For more analysis of the 2012Census of Agriculture, visit:www.farmlandinfo.org/statistics#Census of Agriculture. ■

Census shows steady declinein land devoted to farming


www.usda.gov/investmentconference.

Promoting rural healthcare In another indication of how Farm

Credit works with USDA, AgStarFinancial Services and United FCS havepartnered with Renville CountyHospital and Clinics in Olivia, Minn.,

on a renovation and expansion project.The $24 million project was madepossible through many partnerships,including investments from AgStar,United FCS, CoBank and financingfrom USDA Rural Development. Inaddition, Renville County Hospital andClinics has committed a portion of theproject costs from its own cash reserves.

This 62,000-square-foot projectincludes a new clinic featuring 15 examrooms and one procedure room, 16inpatient beds, lab radiology andtherapy, outpatient and specialty clinics,

two operating rooms and an educationcenter.

Marc Knisely, CEO of United FCS,says the project provides localcommunities with improved access toquality health care today while alsopromoting opportunities for futureexpansion of services.

Both of these endeavors show thatthe cooperative mission of FCS canmanifest in many worthy ways, andUSDA Rural Development looksforward to more such collaborativeefforts in the future. ■

Commentarycontinued from page 2

in the world, supplying fresh,maraschino, dried and frozen sweetcherries, as well as blueberries andother fruits. “Since our line of RoyalHarvest Maraschinos already met all ofthe non-GMO criteria, it seemed onlynatural that we would pursue the non-GMO certification,” Tim Ramsey, theco-op’s CEO, told the newspaper.

Founded in 1932, Oregon CherryGrowers is a grower-owned cooperativeof family farms cultivating,manufacturing and marketing fruitgrown in the Willamette Valley and theColumbia River Gorge. The co-opemploys more than 400 people at itsprocessing plants in Salem and TheDalles.

Co-op using USDA loan tocreate new jobs in forestproducts

A Wisconsin forest products businessis set to expand with the help of a ruraldevelopment loan secured by BarronElectric Cooperative. The $657,000loan, issued by USDA RuralDevelopment under its Rural EconomicDevelopment Loan and Grant(REDLG) program, will enable Tri-State Lumber & Land to add as manyas 10 jobs during the next three years,according to a report on the ElectricCooperatives Today website.

The company’s growth plans call forproducing pallet parts from small-diameter, low-grade timber, which willmaximize production of all harvested

timber. USDA says the loan also willpreserve 20 jobs at the business inTrego, in northwest Wisconsin.Founded in 1996, Tri-State Lumber &Land is a locally owned sawmill thatspecializes in high-grade lumber,paneling, flooring, corner trim andmoldings for wholesale and retailmarkets.

USDA’s REDLG program provideszero-interest loans for co-ops to relendfor job creation efforts, typicallythrough revolving economicdevelopment accounts. Co-ops support

the program through prepayment oftheir Rural Utilities Service loans.

Trupointe Co-op opens Indiana facility

Trupointe Cooperative in Aprilopened a full-service agronomy hub inMilford, Ind. Located on a 275-acresite, the facility will hold 2 milliongallons of liquid fertilizer and 37,000tons of dry fertilizer. Its automatedhandling systems will provide accuracyand efficiency with load-out times set atseven minutes for dry fertilizer, 17

minutes for liquid fertilizerand 15 minutes foranhydrous ammonia.Certain products will beavailable for loading 24hours a day, seven days aweek.

Chase Snyder is themanager of the newagronomy facility. Snydergraduated from Ohio StateUniversity with abachelor’s degree in cropscience and agriculturalsystems management. Hepreviously worked as asuperintendent atConsolidated Grain &Barge in Mount Vernonand Princeton, where hemanaged grain quality,personnel, logistics and thepreventative maintenanceprogram. ■

Construction work was nearing completion when this photowas taken inside the dry fertilizer storage building at the newTrupointe Cooperative agronomy hub in Milford, Ind. Thefacility opened in April. Photo courtesy Trupointe Co-op


blends — each 40,000 pounds of rawproduct — at Sno Pac Foods in theearly winter of 2013. By collecting pre-orders from enough institutionalbuyers, Chapeta was able to justifymoving forward with the project. Theresult was a success for Fifth SeasonCooperative, and for farmers andschools, as well as the otherinstitutional buyers.

Historically, tracking food throughconventional supply chains — with thegoal of educating consumers about theorigins of their food — has beendifficult. In typical supply chains, whereprocurement decisions are made basedon least expensive available product, theorigin of products can be highlyvariable.

However, Fifth Season provides fulltransparency on product origins for allcustomers. For the frozen blends, FifthSeason provided farmer-identifiededucational materials, giving theconsumer information about thefarmers and their growing practices.

The winter availability of theselocally grown products helpedinstitutions meet the demands of theircustomers to extend the season for localproducts. The schools ability to orderfrozen, locally grown products throughtheir existing distributor was seen ashighly convenient, while simultaneouslyproviding the opportunity for small-and mid-sized growers to access newinstitutional markets.

Promising markets and values-based supply chains

Fifth Season Cooperative used 90percent cosmetically imperfect secondsto create its root vegetable blends andwill continue to develop a new productline of frozen, minimally processedvegetables and vegetable blends in thecoming years. For the 2014 season, the

co-op has begun the build up toincrease production two-fold of theproven blends. This is a direct responseto the increased demand for theproducts from institutional andcommercial buyers.

Co-op leaders say it appears likelythat the sales volume of the vegetableblends will increase in 2015 and 2016and that new products will be added tothe co-op’s offerings, including carrotfries, a late-summer vegetable medleyand pureed products.

Organic Valley benefited greatlyfrom the success of this project. Thesmall family farmers in this cooperative,many of whom are Amish farmers,produced all of the butternut squash,red beets and golden beets for theWinter Moon Blend, most of whichwere seconds. Until this project, thefarmers had not found a suitable marketfor their cosmetically imperfectseconds.

The relationship between OrganicValley and Fifth Season Cooperative isreciprocal. Organic Valley provideslocally grown organic vegetables andFifth Season provides member-ownedprocessing infrastructure and a marketfor these products through itsdistributor-member, Reinhart FoodService. These relationships have comefull circle within Fifth Season.

Robust, regional food systemFifth Season Cooperative, as part of

an applied research project, fosteredsupply chain relationships that created amarket for under-utilized produce,enhanced business viability, providedfair pricing to farmers and suppliedchildren with healthy food at areasonable cost. By developing a robustregional food system that increasesaccess for small farmers to institutionalmarkets, Fifth Season is building astrong, resilient local economy.

Fifth Season provides a model ofhow cooperatives can contribute toeconomically thriving communities bybringing together groups that typicallydo not work closely together, such asdistributors and small organic farmers.Because these diverse stakeholders are

sitting at the same table to makedecisions, accountability exists where itotherwise may not.

This accountability between thesupply chain sectors leads to increase incommunication and trust at theindividual level, which results inadequate transparency at the individualand organizational levels. Fifth Season’smodel is changing the culture of doingbusiness within an otherwiseconventional food supply chain and isnormalizing a new approach, rooted inaccountability and transparency acrosssectors.

The values of environmental, socialand economic health and fairnessmotivate the co-op to produce, processand market healthy, locally grown foodsin its region. As Fifth Season continuesto grow and build a community andregional food system, the hope is thatthe values themselves will transformrelationships that have the potential forpositive social change.

If the success of Fifth Season is anysign of the potential of this model, thenthere should be great hope andconfidence for building sustainable localfood systems across the country. ■

References• Berkenkamp, Joanne. (2014). Eating our Peas

and Carrots: Strategies for Expanding K-12.Access to Fruits and Vegetables ThroughSupply Chain Innovation and Investment.Prepared for School Food Focus a program ofPublic Health Solutions

• Centers for Disease Control and Prevention.(2011).Youth Risk Behavior Survey. Available at:www.cdc.gov/yrbs. Accessed January 2014.

• Edwards-Jones, G., Milà i Canals, L.,Hounsome, N., Truninger, M., Koerber, G.,Hounsome, B., ... and Jones, D. L. (2008).Testing the assertion that ‘local food is best’: thechallenges of an evidence-based approach.Trends in Food Science and Technology, 19(5), 265-274.

• Day-Farnsworth, L., and Morales, A. (2011).Satiating the Demand: Planning for AlternativeModels of Food Distribution. Journal ofAgriculture, Food Systems and CommunityDevelopment, 2, 227-247.

• Goldberg, G. (Ed.). (2008). Plants: diet andhealth. The report of a British NutritionFoundation Task Force, Blackwell PublicingLtd., Oxford, UK John Wiley & Sons.

• Hinsch, R. T., Slaughter, D. C., Craig, W. L.,and Thompson, J. F. (1993). Vibration of freshfruits and vegetables during refrigerated trucktransport. Transactions of the ASAE, 36.

The Right Blend continued from page 17

46 January/February 2014 / Rural Cooperatives

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