Rural COOPERATIVES USDA / Rural Development March/April …James Matson 15 Foreign affairs USDA Foreign Agricultural Service promotes U.S. agriculture abroad Karl Hampton 18 Going

COOPERATIVESRura

lCOOPERATIVESUSDA / Rural Development March/April 2000USDA / Rural Development March/April 2000

Tu r n i n g s o f t w o o l i n t o h a r d c a s h

2 March/April 2000 / Rural Cooperatives

As we begin this century of increasedglobal interaction and communication,we recognize the need to work towardimproving the technological infrastruc-ture of rural America. Increasing thelevel of agricultural trade with foreignnations will do much to improve theeconomic vitality of rural America andthe rural cooperatives which are so vitalto its well-being.

There are several articles in this mag-azine that detail trade programs andtechnical assistance efforts betweenthe United States and our internationalpartners. Some of these initiatives, suchas our effort to create cooperative villagebanks in South Africa, will help thosewho are disenfranchised by poverty. Weare also committed to working with ourinternational partners whose future eco-nomic development will create market-ing opportunities for rural Americans.

USDA Rural Development has bilat-eral programs to help countries in thishemisphere with their agricultural devel-opment efforts. We expect to continueoffering our assistance in a range of dis-ciplines, from production techniques, tomarketing, extension, pest and diseaseeradication, and food safety, among oth-ers.

In the United States, agriculturalcooperatives remain a key component ofrural economies. While “rural” is morethan agriculture, the future success ofour nation’s small farms and their coop-eratives is critically linked to the successof economies of rural communities towhich they are interconnected.

Our rural economy has strengthenedand is growing, but remains fragile anduneven. Rural earnings, after a decadeof decline, are rising at rates similar tourban rates in some areas, as is per capita

income. Rural unemployment continuesto decline, to historically low levels.However, challenges remain. Even withdouble-digit percentage growth in theamount of jobs, the incomes remain sig-nificantly lower in rural areas relative tourban areas.

In June of 1998, when I hosted theSecond International Conference onWomen in Agriculture, more than 1,000participants from 50 countries cametogether to discuss issues facing womenin agriculture and to facilitate theexchange of information. During theconference, we established that in ruralcommunities around the world, we havesimilar challenges, many of which can beaddressed by cooperatives. Creating val-ue-added cooperatives can do much togenerate additional income for ruralpeople, as shown by the cover story inthis issue about how rural women inAlaska are earning income by knittingmusk ox wool into beautiful garments.

In June of 1999, we successfullybrought together leaders from severalcountries to create cooperative relation-ships to strengthen our nations’ ruralareas and increase the channels of com-munication between rural Latin Americaand rural United States. Again, wefound that we share similar concerns,such as overcoming limited technologi-cal alternatives.

With President Clinton and VicePresident Gore’s leadership, we areworking to build partnerships and devel-op a comprehensive approach to closingthe digital divide and bringing digitalopportunity to all Americans. Bringingadvanced telecommunications technolo-gy to rural America has made significantimpacts on people’s lives. Through ourvarious programs, Rural Development is

providing many advantages to rural elec-tric and telephone cooperatives toreceive funding for the purpose ofputting these new technologies to workfor rural residents. We are also workingto create opportunities with current andpotential trading partners around theglobe. Communities will revitalizethemselves when opportunities exist forentrepreneurial initiatives, small businessexpansion and job training — all ofwhich offer upward mobility withoutcommunity members having to move tourban areas to find employment.

In closing, rural economic develop-ment and poverty alleviation strategiesshared between countries and rural com-munities will ultimately lead to enrichedfamilies, empowered communities, anddeveloped nations.

Jill Long ThompsonUnder Secretary, USDA Rural Development

C O M M E N T A R Y

Borders are no longer barriers for co-ops

Rural Cooperatives / March/April 2000 3

F E A T U R E S

4 Boosting the 3 Bs England’s Plunkett Foundation promotes “the furtherance ofrural cooperation”Eliza Banks

7 Fingers and needlesAlaskan co-op turns cashmere-soft musk ox wool into hard cashPamela J. Karg

12 Strength through unityBulgarian honey producers sweeten their future through cooperationJames Matson

15 Foreign affairsUSDA Foreign Agricultural Service promotes U.S. agricultureabroadKarl Hampton

18 Going globalExport certificates a valuable tool helping co-ops tap overseasmarketsAlan Borst

23 Why U.S. agriculture should support foreign aidPerry Letson

D E P A R T M E N T S

2 COMMENTARY

22 A CLOSER LOOK AT…

25 MANAGEMENT TIP

27 NEWSLINE

RURAL COOPERATIVES (1088-8845) is publishedbimonthly by Rural Business–Cooperative Service,U.S. Department of Agriculture, Washington, DC. The Secretary of Agriculture has determined thatpublication of this periodical is necessary in thetransaction of public business required by law of the Department. Periodicals postage paid atWashington, DC. Copies may be obtained from theSuperintendent of Documents, Government PrintingOffice, Washington, DC, 20402, at $3.50 domestic,$4.38 foreign; or by annual subscription at $15.00domestic, $18.75 foreign. Postmaster: send addresschange to: Rural Cooperatives, USDA/RBS, Stop 3255,Wash., DC 20250-3255.

Mention in RURAL COOPERATIVES of company andbrand names does not signify endorsement overother companies’ products and services.

Unless otherwise stated, contents of this publica-tion are not copyrighted and may be reprintedfreely. For noncopyrighted articles, mention ofsource will be appreciated but is not required.

The United States Department of Agriculture (USDA)prohibits discrimination in all its programs and activities on the basis of race, color, national origin,sex, religion, age, disability, political beliefs, sexualorientation, and marital or family status. (Not all prohibited bases apply to all programs). Persons with disabilities who require alternative means forcommunication of program information (braille, largeprint, audiotape, etc.) should contact USDA’s TARGETCenter at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA,Director, Office of Civil Rights, Room 326-W, WhittenBuilding, 14th and Independence Avenue, SW,Washington, D.C. 20250-9410, or call (202) 720-5964(voice or TDD). USDA is an equal opportunityprovider and employer.

Dan Glickman, Secretary of Agriculture

Jill Long Thompson, Under Secretary,Rural Development

Dayton J. Watkins, Administrator,Rural Business–Cooperative Service

Gladys Rodriguez, Director of Public Affairs

Dan Campbell, Managing Editor

USDA Design Center, Design

Have a cooperative-related question?Call (202) 720-6483, orFax (202) 720-4641, Information Director,

This publication was printed with vegetable oil-based ink.

United States Department of Agriculture

COOPERATIVESRura

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COOPERATIVESMarch/April 2000 Volume 67 Number 2

O n t h e C o v e r :

Once extinct in Alaska, the musk ox has made a major comeback. A cooperativeof Alaskan Eskimo women are transforming its soft wool into high-fashionaccessories and earning much-needed income for their poor, rural communities. Story on Page 7. Photo copyright Musk Ox Farm


By Eliza Banks

n America, hardly a coop-erative celebration goes bywhen those English crafts-men who formed the

Rochdale Equitable Pioneers Societyaren’t feted for their foresight. So itmay come as a surprise that there’soften a perceptible lack of enthusi-asm toward cooperatives in thevery country credited with theircreation.

But that’s the situation insome sectors of the United King-dom today. Despite this skepti-cism, however, for 80 years therehas been one voice encouraging,cajoling, and supporting coopera-tives and the people who want tostart them. At the Plunkett Founda-tion, near Oxford in south-centralEngland, a team of dedicated cooper-ative advocates acts as a driving forcebehind the growth of UK rural cooper-atives and other member-controlledbusinesses.

Through its accumulated experi-ence, extensive network of consultants,and a reference library approaching40,000 books, journals and articles, thePlunkett Foundation strives to offerappropriate support and sign-postingto all types of cooperatives both in theUK and around the world.

An “Anglo-American Irishman”Established in 1919, the Plunkett

Foundation bears the name of itsfounder, the cooperative organizer,agriculturalist and statesman SirHorace Plunkett (1854-1932). In pur-suit of his famous “Three Bs” (BetterFarming, Better Business, Better

Living”), Plunkett and a small band ofinfluential, but rigorously non-politi-cal, associates inspired the creation ofliterally hundreds of cooperatives,first in Ireland and then around theglobe.

In the 1880s, Plunkett spent part ofeach year as a Wyoming cattle rancherand shrewd observer of rural progress,including the growth of the NationalGrange movement. Returning to Ire-land in 1889, he soon set about a non-stop program of cooperative develop-

ment and agricultural education. Afterrepeated failures, Plunkett establishedhis first cooperative “creamery” in1891. Three years later, he founded thecountry’s apex organization for the bur-geoning number of agricultural coop-

eratives. His diaries, kept in theFoundation’s unique cooperative ref-erence library, describe the exhaust-ing work of organizing co-ops inthe face of stern opposition fromlocal moneylenders, traders, andother vested interests.

Still a frequent visitor to Ameri-ca, and now Ireland’s equivalent tothe Secretary of Agriculture, Plun-kett became a close associate andconfidant of President TheodoreRoosevelt and his apostle of conser-

vation, Gifford Pinchot, sharingideas on rural development and, in

1910, publishing The Rural Life Prob-lem of the U.S.

“By golly,” Roosevelt is quoted asbooming to Plunkett, “I wish you werean American and either in the Senateor my Cabinet!” Plunkett’s Americanconnections didn’t end there, and hesubsequently shared his enthusiasm forempowering farmers with PresidentsTaft and Wilson.

Reluctance persistsSo, after all this time, why aren’t UK

farmers more aware of the benefits ofco-ops? And why do UK farmers har-bor resistance to collaboration, eventhough cooperative involvement isstrong in many sectors and is arguablyvital to competing in a global market?The reasons are largely historical.

First, England’s smaller geographicarea, greater population density, andvillage trading infrastructure meant

B o o s t i n g t h e 3 B sEngland’s Plunkett Foundation promotes “The furtherance of rural cooperation”

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H O R A C E P L U N K E T T


that, for most of rural England — andunlike Ireland or the United States —there were few compelling reasons to“circle the wagons” in cooperation.

Second, in the mid-20th century thisisland nation’s need to sustain core agri-cultural productivity was exacerbated bywar. Unfortunately, the support pricingand capital grants for this purpose wereonly made available to individual farms,thus creating no incentive for coopera-tion. Ironically, the converse of this washappening in Continental Europe,where agricultural economies were beingrebuilt using cooperation as one of thefoundation stones.

Third, there is the legacy of statuto-ry marketing boards in commoditiessuch as milk, wool and potatoes. Untilrecently, that meant individual produc-ers did not have control over this linkin the chain.

And finally, even today, there iswidespread lack of knowledge aboutco-ops and how they work. The subjectreceives little, if any, attention in the

nation’s curriculum (and sometimeseven in major schools of agriculture).And there have been no significantinjections of government capital or adesignated body to promote the devel-opment of cooperative enterprise.

Taken together, these factors haveperpetuated a reluctance to embracecooperation. It is this gap that thePlunkett Foundation seeks to fill with acombination of information, advice,seminars, study tours and advocacy.The current dire straits in UK agricul-ture would appear to be generating are-appraisal of cooperation and itspotential, notes Information ServicesManager Kate Targett. Necessity, sheobserves, has often been the mother ofcooperatives as well as invention.

A native of Michigan, Targett hasbeen working recently to extend theFoundation’s reach still wider byuploading the library’s key-wordedindex onto the Internet, a project madepossible by a grant from the Dublin-and Boston-based Ireland Funds.

Tradition and individualityIn contrast to America’s ready

acceptance of expansion and innova-tion, the UK agricultural industry hasalways taken pride in its long tradi-tion, as well as its individuality. Fromher perspective, though, Targettbelieves that UK cooperators couldprofitably take on board some lessonsfrom their counterparts across theAtlantic. “At the moment,” she says,“the United Kingdom probably hasmore to learn from America than itcan teach the United States, althoughit has to be remembered that the situ-ations are by no means parallel, par-ticularly in terms of scale and publicpolicy.”

Having observed the English scenefor 15 years, she suggests that abilitiesto change may constitute a further dif-ference. “Whereas Americans willoften default to ‘Why not?’ the Britishattitude is sometimes ‘Rather not,’” shenotes. For example, UK cooperativeshave been slow to adopt vertical inte-

The Plunkett Foundation is used as a resource by cooperatives worldwide, including this women’s dairy cooperative in Egypt. Photos courtesy the Plunkett Foundation.


gration as a means of capturing addedvalue for the producer and keepingpace with developments in Europeanand American markets. Meanwhile,cooperatives such as those in Denmarkand Sweden have forged ahead in pro-cessing and marketing products sup-plied by co-op members.

Cream rises . . . or sour milk?Yet there are small signs of change

afoot in some UK sectors, such as dairy-ing, where there are examples of success-ful processing subsidiaries. For the mostpart, however, the dairy industry hasevolved differently from the U.S. andEurope. From the 1930s, the existenceof the Milk Marketing Board meant thatthe industry’s processing and manufac-turing capacity developed privately.However, farmers soon became con-cerned that they were missing out on anyresulting “added value,” which eventual-ly led to the formation of the Board’swholly owned subsidiary Dairy Crest.

When the Milk Marketing Board wasderegulated in 1994, Dairy Crest was pri-vatized (although farmers owned most ofthe shares). At the same time, Milk Mar-que was formed and became the largestdairy cooperative in the European Union.Initially, it was able to use its strength onbehalf of its members. But the crunch

came last summer when the government’scompetition authorities published areport highly critical of Milk Marque’sselling system. As a consequence, thecooperative decided to split into threeroughly equal regional cooperatives.

Commenting on these developmentsat a recent Plunkett Milk Groups Con-

ference, the Foundation’s Chief Execu-tive Simon Rawlinson noted, “It seemsa travesty that, while the rest of theworld seems to be reaping the benefitsof vertical integration and economiesof scale, the UK seems to be beingforced to regroup and start again. Noother dairy industry in a developedcountry has attracted the same atten-tion from the competition authorities,despite many others having a muchlarger market share.”

Working around the worldThe Plunkett Foundation’s achieve-

ments in the UK are rivaled only by itssuccesses abroad, where it providessupport tailored to the conditions ofemerging user-controlled groups andbusinesses. With a tradition of overseasdevelopment going back decades, theFoundation recently has been heavilyinvolved with the emerging democra-cies of Eastern and Central Europe and

the former Soviet Union. Here, wherecooperatives had become “top-down”arms of state policy, the Foundationfound a lot of work combating the dis-credited image of cooperation. It hasmet with notable success, Targett says.

In Poland, projects funded by theEuropean Commission and the UK’sDepartment for International Develop-ment successfully encouraged farmersto diversify operations and keep ruralcommunities viable. In one instance,Britain’s holiday tradition of “bed andbreakfast inns” inspired Polish farmfamilies to develop a niche market foragri-tourism. Recent study tours havebeen arranged for delegates from Aus-tralia and Zimbabwe. Earlier programshave influenced participants from Alba-nia, China, Grenada, Hungary, Italy,Japan, Lesotho, Moldova, St. Lucia,Uzbekistan and Zambia, among others.

The Foundation’s Library and Infor-mation Service is open to all, and a lim-ited amount of assistance and consulta-tion is provided free. Lists ofpublications concerning every aspect ofcooperative theory and practice areavailable on request, and should soonbe accessible via the Internet.

As an educational trust, the Founda-tion is not, despite its name, a grant-mak-ing organization. Its income is generatedfrom memberships; project funding fromthe European Commission, the UK’sDepartment for International Develop-ment, and a variety of NGOs and devel-opment agencies; and the sale of publica-tions. Since 1927, it has published anannual anthology of international coop-erative know-how, now entitled TheWorld of Co-operative Enterprise, as well asbeing the only organization to compileand publish an annual directory and sta-tistics of UK agricultural cooperatives.

For more information on the Plun-kett Foundation and its services, visitits website at www.co-op.co.uk./ukcm/plunkett/index or [email protected]. ■

Editor’s note: Raised on an Upper Mid-west family dairy farm that does businessthrough cooperatives, Eliza Banks is now awriter based in North Yorkshire, England.

The headquarters of the Plunkett Foundation, Oxford, England, where they are in the process ofuploading their key-worded index onto the Internet so emerging and established user-controlledgroups and businesses can learn more from this world-class cooperative resource.


Pamela J. KargField Editor

oft yet sturdy. Thin butwarm. That’s how SigrunRobertson describes thegarments marketed by the

Oomingmak Musk Ox Producers’Cooperative.

“Qiviut is similar to fine cashmere,”explains Robertson. She has been withthe cooperative since it began in 1969and now serves as its executive director.“And our members love working withthis beautiful fiber to make beautifulproducts. They’re artisans,” she adds.

Mention musk oxen to most peoplein the lower 48 states, and their ques-tioning eyebrows belie the fact they

know little about this cousin to sheepand goats. But in the open tundra andwell-vegetated terrain of Alaska, Cana-da and Greenland, this short-legged,massively built animal with broad,down-curving horns and an ankle-length outer coat is well known.Alaskan agriculture has helped themusk ox evolve into a sustainableenterprise. But it wasn’t always thatway.

Bringing the musk ox backMusk oxen are neither oxen nor do

they have glands to produce musk, andthey resemble bison. While their fossilshave been found as far south as Ohioand France, scientists believe muskoxen wandered across the Bering

Straits on a narrow land bridge toNorth America nearly 2 million yearsago. By the 1850s, though, they hadbeen hunted to extinction in Alaska.

In the mid-1950s, a Conneticutnative set out to prove that musk oxencould be domesticated and raised sus-tainably. The late John J. Teal Jr.returned from World War II as a deco-rated B-17 bomber command pilot inthe European campaign. He earnedbachelor’s and master’s degrees inanthropology from Harvard and Yale,respectively. Teal had a research fellow-ship at McGill University in Montrealand was teaching at the University ofVermont when he established the Insti-tute of Northern AgriculturalResearch, headquartered in Hunting-

F i n g e r s a n d n e e d l e sAlaskan co-op turns cashmere-soft musk ox wool into hard cash

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Oomingmak members determine how much they want to knit and at what pace based solely on the amount of money they need for their families.Photo by Bill Bacon, courtesy Oomingmak Musk Ox Producers’ Cooperative.


ton, Vt. The NAR’s primaryproject was to re-establish muskoxen in the United States. Tealcaptured his first animals duringa Canadian expedition in 1954.Eventually, he established a herdfor the University of Alaska,Fairbanks, and managed it formany years.

Teal’s premise was simple.Rather than introduce exoticanimals such as cows or llamas tothe Alaskan landscape, he wantedto develop a cottage industryaround an animal or plant nativeto the region.

The ankle-length guard hairstake musk oxen four to six years togrow and are essential in protecting theanimals against temperatures that candip to 100 degrees below zero. Butbeneath that outer coat, Teal knew, is alight brown, soft, dense undercoatknown as qiviut (pronounced kiv-ee-ute, meaning “down” or “underwool”in the Inupiat Eskimo language).

Eight times warmer than sheep woolby weight and very lightweight, qiviutis one of the finest natural fibers knownto man and is often referred to as “thecashmere of the North.” By domesti-cating the animal, native peoplelearned the undercoat could be combedout, cleaned to capture the fine qiviut,spun into yarn and used to knit gar-ments. Rather than raising musk oxenfor meat and hides, the animal couldprovide a renewable resource through-out their lives, Teal was convinced.

Co-op starts with 25 membersThe domestication of the musk ox

and the start-up of the Oomingmakcooperative are tightly inter-woven. By1969, enough qiviut had been convert-ed to yarn to put it into production.The first 25 knitters were all fromMekoryuk, Alaska, located on NunivakIsland. They were encouraged to trythe fiber and they enlisted as the coop-erative’s founding members. Researchhad shown qiviut was better suited toknitting than weaving, and knitting wasa skill Eskimos had learned from mis-sionaries. The fine needles required for

the delicate patterns also meant lessequipment and little financial invest-ment, Robertson says.

The patterns were adopted from tra-ditional village life and Eskimo culture— from 1,200-year-old artifacts to bead-work designs. The patterns were con-verted into graphic instructions easilyunderstood by the older women, most ofwhom were not familiar with the com-plex written English instructions used intypical knitting patterns. Workshopswere held so members could learn howto read the patterns and complete thelace-like stitches. More importantly,members learned how to handle qiviut.

“It’s spun much finer than whatyou’re used to with other yarns,”Robertson explains.

After the first year, 27 knitters fromMekoryuk turned the qiviut into 291scarves, stoles, tunics and nachaqs(which is now the cooperative’s special-ty item and means hat or hood in Eski-mo. The nachaq, also called a smoker-ing, is a seamless, tubular garment thatcan be worn as a hood or pulled downaround the neck like an over-stuffed,yet decorative, turtle-neck accessory).

Almost immediately, large retailerssuch as Nieman-Marcus featured qiviutgarments. But the large orders, oftenrequiring special sizes and particularcolors in a short amount of time,exceeded what the small cooperativecould produce.

“In retrospect, perhaps it was overlyambitious to think that handknit qiviut

garments could easily step into the fastand fickle world of fashion,” Robertsonreported in a paper presented at theFirst Arctic Ungulate Conference inNuuk, Greenland, in 1991. “Instead,the qiviut garments have found theirown particular market, one that canaccept their peculiarities and appreciatetheir very special qualities.”

Over 200-members strongOriginally, the plan was to wash and

block garments in members’ homes orto start washing and blocking coopera-tives in nearby villages. As it turnedout, sending the garments to the coop-erative’s office and store in downtownAnchorage is a way to ensure quality.Five employees, including Robertson,wash and block garments, as well asinspect them to assure they are as per-fect as possible. They also work the

Photo by Gary Lackey, courtesy Oomingmak Musk Ox Producers’ Cooperative.

Photo by Ron Eagle, courtesy Oomingmak Musk Ox Producers’Cooperative.


retail store six days a week and fillorders received over the Internet(www.qiviut.com). The boldly paintedmusk oxen adorning the storefronthave made the cooperative a popularshopping stop for visitors.

Today, over 200 knitter-members,ranging in age from pre-teens tooctogenarians, own Oomingmak.

Many are related or are close friendswho helped each other get startedknitting and into the cooperative. Allare women, though men have beenmembers in the past, and nearly allthe members are Alaskan Eskimos,who work from home in villages rang-ing from 150 to 300 people.

The cooperative buys most of itsqiviut from the herd Teal helped estab-lish, now kept in the Matanuska Valleynear Palmer and operated by the Musk

Ox Development Corp. as a privatenonprofit organization dedicated to thedevelopment and domestication of themusk ox. The cooperative contractswith a cashmere mill on the East Coastto wash, de-hair and spin the fine yarn.Up to 600 pounds — or hair fromabout 100 musk oxen — are requiredby the mill for each run.

Back in Alaska, the yarn is sent tomembers. There are no quotas to fill.Members determine how much theywant to knit and at what pace basedsolely on the amount of money theyneed for their families. After the fin-ished garment is sent to Anchorage, themember is paid. Seventy-five percentof the garments are sold directly fromthe cooperative to customers. Pricesrange from $95 for a bell-shapedCloche cap without a cuff to $495 for a

sleeveless, open-sided tunic that comescomplete with a hand-braided qiviutbelt. Twenty-percent of the garmentsare sold through a gift shop at theMusk Ox Farm.

In fiscal 1999, the cooperative’s saleswere $600,000. After expenses, mem-bers receive a dividend check based onthe number of garments they marketedthrough Oomingmak.

“In spite of the co-op’s relative suc-cess, it probably has not made much ofa dent in the many problems of theregion,” Robertson says. “However, theco-op was created not to make greatsweeping changes in the native culture(thereby creating new problems), butto help with problems within the tradi-tional mode of life. This is not aboutmaking money hand-over-fist.”

Challenges and opportunitiesProblems facing Alaskan Natives

are attributed to the introduction ofEuropean culture and its need forcash to buy ammunition, fuel, elec-tricity, clothing, and even food, sheexplains. Before that, Eskimos ledsubsistence lifestyles and took or cre-ated from the natural resources every-thing they needed.

Over 26 percent of the 50,000 ruralAlaskan Natives have incomes belowfederal poverty levels, compared toonly 9 percent of non-native Alaskans.The problem is perpetuated byAlaskan Natives’ isolation from thecash economy.

While most Oomingmak memberslive in the Yukon Kuskokwim region,which can be reached only by air, theirlifestyles now depend upon a blend ofsubsistence and capital enterprise.Most people fish, hunt and collectberries in season, and many men leaveheir communities for months at a timeto find jobs in larger cities.

Isolation makes running a coopera-tive challenging, too. The six-personboard meets quarterly, after whichmembers receive a newsletter withupdates on board actions, calving,sales and what satisfied customers aresaying. Repeatedly, members have tobe reminded that Oomingmak is their

John J. Teal Jr. re-introduced the musk ox to Alaska and insisted they be used in a sustainable enterprise. As a result, 25 members started the Oomingmak co-op. Their knitted garments include symbols that celebrate their Eskimo culture.


cooperative and what that owner-ship means.

The education process will startanew this year because a new productline is being introduced. Aftermonths of research, the cooperativewill market garments from a luxuri-ous fiber of 80 percent qiviut and 20percent silk. For the first time since1976, a membership drive is plannedin new communities in the YukonKuskokwim and Interior regions, andSt. Lawrence Island, where some ofthe state’s highest unemploymentrates – 18 to 63 percent – exist.

The cooperative took out a loan tobuy Canadian qiviut for the new line.The mill the co-op uses will add silkfrom its existing stock. The cooperativeapplied for grants to cover staff recruit-ment time and travel, and new member

training on both the knitting and coop-erative ownership fronts.

“The cooperative has successfullybeen in business for 30 years, provid-ing rural Alaskans an opportunity towork part time and earn cash incomefor their families,” Robertson says.

“Expanding the membership willoffer this same economic opportu-nity to women living in other eco-nomically depressed communitiesin the state.”

Taking the loan to buy the Cana-dian fiber was a big step for directors,but necessary. When the 100-percentqiviut yarn is plentiful, members areencouraged to knit more garmentsand they respond, filling the shopwith plenty of goods. But then theyarn supply runs low and the stocksdrop. By starting up the qiviut-silkline, the cooperative may be able to

ease the problem, which occurs aboutevery four years.

“I’m not sure what tomorrow’s chal-lenges will be,” she adds. “But I doknow they will center around fingersand needles,” she adds. ■

In the 1940s and 50s, wild musk oxen were a disaster or twoaway from extinction and the villages of coastal Alaska weresome of the most impoverished in the world. Where otherssaw two utterly hopeless situations, John Teal’s eyes sparkledand a vision was born.

In this windswept and inhospitable land, he saw an oppor-tunity for Alaskan Natives to live together peaceably with thisanimal so both would thrive. After more than a decade ofresearch, Teal started what came to be known as the Musk OxProject. Supported by funding from the W.K. Kellogg Founda-tion, as well as assistance from the University of Alaska andcountless volunteers, the project started Alaska’s first domes-tic musk ox farm in Fairbanks in 1964.

Today, the farm (www.muskoxfarm.org) is situated out-side Palmer in the Matanuska Valley, about 50 miles fromAnchorage. It’s managed by the Musk Ox DevelopmentCorp., a private nonprofit organization dedicated to thedevelopment and domestication of the musk ox, Ovibosmoschatus. Teal’s youngest son, Lansing, oversees its oper-ations today, spending the greatest share of his days at thefarm with the herd.

Every year, thousands of visitors stop by the farm duringregular tour times offered from Mother’s Day through late Sep-tember. At the end of the summer, visitors anticipate theimpressive dominance displays of rutting bulls in preparing forthe breeding season.

The famous head smashing occurs between males vying forbreeding privileges. Two males will engage in a ritualized dis-

play designed to intimidate each other, including pawing at theground, walking stiff-legged, and aggressively swinging theirmassive horns. Following the displays, the bulls will face-offand back up about 100 feet before charging together at speedsclose to 35 miles per hour. The head smashing may continuefor up to a dozen times before one bull quits and submits to theother.

Several separate harems form in the fall. Each harem con-sists of one bull and a selected group of cows. Breeding linesare chosen to promote qiviut production, tameness, health andto avoid inbreeding. Following six weeks in harem, the cowsare moved to a separate pasture and monitored throughouttheir eight-month gestation. Calves are born any time frommid-April to early May, and can weigh up to 25 pounds. Theyare born with a full coat of qiviut and boundless energy. Thecalves are the main attraction on opening day — Mother’s Day— at the farm.

Tour fees in combination with foundation grants and privatedonations help the farm continue the mission John Teal begannearly 50 years ago.

“Perhaps the most meaningful support that the farmreceives is the many entirely voluntary contributions made bythe Friends of the Musk Ox, the public membership arm of theproject,” explains Lance Teal. “A wide variety of people havecontributed to the project. From ‘Herd Parent’ Alex Trebek ofJeopardy! fame to local volunteers lending a hand repairingfences and fixing hay feeders, donors and volunteers haveremained integral to the success of our work.” ■

The Musk Ox Farm continues Teal’s work

A cousin to sheep and goats, the short-legged, massively built musk ox, with its broad down-curving horns, is neither an ox nor does it haveglands to produce musk. Photo copyright Musk Ox Farm.


A South African financial services co-operative (“vil-lage bank”) was one of 44 projects to share in $5 millionawarded during a World Bank competition for innovativecommunity development proposals. The U.S. Departmentof Agriculture’s Rural Business-Cooperative Service hasbeen involved in a project under the auspices of theU.S./South African Bi-National Commission to assist inthe development of these so-called village banks.

The proposal, “Leveraging Local Savings for LocalDevelopment,” received $60,000 in the competition. Itwas selected from a group of 339 finalists from 60 coun-tries. The finalists were chosen from nearly 2,000 entries.Finalists set up booths in the atrium of the World Bank’sheadquarters in Washington, DC, and were asked toexplain their projects to a panel of judges.

Wezi Ximaya, chief executive officer of the FinancialServices Association, a trade and financial servicesassociation in South Africa, represented the project inthe competition. According to Ms. Ximaya, the “localsavings for local development” proposal focuses on therole of a newly organized financial services cooperativein an overall community development effort. The fundswill be used to conduct pilot community developmentprojects in rural South African villages that already havetheir own financial services cooperatives.

The project was born out of rural South Africa’s deep-rooted mistrust of banks, and the unwillingness of com-mercial banks to serve rural areas. Rural communities,however, need funds for development projects and thelack of financial services can thwart that effort. In addi-tion, Ms. Ximaya indicated that community banking struc-tures have tended to be institutionally weak and not inte-grated with local development priorities.

The solution was to redefine village banking to betterleverage local savings for local development priorities.Working together, organizers, community leaders andresidents created a sound, local institutional structure, a“village bank.” It also serves as a link to the formal finan-cial sector.

The village bank is operated by and for the community.It integrates the community’s development planning anddecision-making processes, and provides local depositand withdrawal services for individuals. The bank alsomakes loans to the community’s traditional authority for

development projects and to community members forentrepreneurial and targeted investment activities.

The World Bank competition was modeled after a sim-ilar competition in 1998 that awarded $3 million in start-up funds to World Bank staff. This year’s competition wasextended to organizations outside the bank.

“It’s remarkable to see so many people from withinand outside the bank join in one very simple objective,which is to see how we can do development better andaddress the issues of poverty,” said World Bank Presi-dent James Wolfensohn. “In the next 25 years, another 2billion people will share the world. Most of them will livein poverty if we don’t take action now,” he said. “Weneed ever more effective, innovative solutions to meetthis challenge. The development marketplace can helpbring our collective experience, knowledge and passionto bear in search for solutions.”

Proposals offered ways to promote good government,combat corruption, develop legal and judicial systems,strengthen financial and regulatory systems, and insulatethe poor from crises. Ideas ranged from creating a centerto train Moldova’s disabled children in crafts and special-ized enterprises to providing cultural sensitivity trainingfor judges in indigenous areas affected by war inGuatemala. Representing the development communityand private sector, jurors judged the proposals on origi-nality, partnerships created, cost effectiveness, potentialfor ownership for those who benefit the most and, aboveall, expected impact on poverty.

Susan Theiler, an agribusiness specialist on assign-ment to the bank from the U.S. Department of Agriculture,visited the event. “The visual impact of these displays isreally amazing,” she said.

For those who weren’t selected for awards, there isstill a chance for funding. “We’re keeping all proposalson the Web and encouraging donors, foundations andmultilaterals to look at them to see if they can fundthem,” said Mari Kuraaishi, one of the event’s key orga-nizers.

Wolfensohn said he was working with the UnitedNations Development Program to try to link unfundedproposals with potential donors through Net Aid, therecently launched Website that acts as a clearinghousefor donors and organizations. ■

South African vil lage banks receive World Bank funding


By James Matson,Agricultural Marketing SpecialistUSDA Rural Development

ons of a medieval Bulgari-an king debated whowould rule after theirfather’s death. The king

requested that a quiver of arrows bebrought to him. He removed a singlearrow and causally snapped it in half.Then he removed the remaining arrowsfrom the quiver, held them out to hissons, and requested they break them.The sons tried to break the bundle ofarrows without success. The king thentold his sons that, individually, people,like the arrows, are easily broken, butthere is strength through unity.

Today, that lesson “StrengthThrough Unity” is engraved in theCyrillic alphabet above the entrance tothe Bulgarian National Assembly inSofia. It’s become a time-tested phrasefrom Bulgarian history and one that’sapplicable across the cooperativeworld.

Bulgarian beekeepers, following thisexample, formed cooperatives to pur-chase supplies and to market their honeyproduction. In a country still undergoingits transition to a market-driven econo-my, individual producers work togetherto coordinate their efforts to create abetter situation for all the beekeeper-members. They’re learning the age-oldlesson of strength through unity.

A traditional productHoney is a traditional Bulgarian

product. It has been produced in Bul-garia for more than 3,000 years. Honeymarketing cooperatives were created

early last century, but were con-verted to collectives in the Sovietera. Traditionally, Bulgaria has astrong domestic honey market.Foreign visitors to Bulgaria’s pop-ular Black Sea resorts supple-mented domestic demand, whichhas aided in the development ofinternational markets.

The 35,000 beekeepersthroughout Bulgaria make up theBulgarian Beekeepers Union,which tries to rectify deficienciesin the country’s beekeeping sys-tem. The Union functions as atrade association, similar to Amer-ica’s Beekeeper Federation orNational Corn Growers Associa-tion. The Beekeepers Union isheadquartered in the capital ofSofia, with regional representa-tives for its 1,700 local beekeepingsocieties.

The years since the breakup ofthe communist system in the early1990s have been tempestuous forEastern Europe. The Bulgarianagricultural sector is no exceptionto this turmoil.

During the communist era,collective farms, often larger than20,000 acres, produced the major-ity of the country’s food. Com-mercialization and costs of pro-duction were not considered.Instead, central planners determinedwhat would be produced and where itwould be shipped. In recent years, thecollective farms were divided intosmaller holdings, and private land own-ership is being slowly re-established.

Bulgaria is characterized by micro-climates — from warm Mediterranean

zones in the south, to broad internalvalleys, and then to mountainous ter-rain that covers 35 percent of the coun-try. As a result, farmers in differentregions produce many crops includingfruits, vegetables and forest products.This agricultural diversity results inmany varieties of honey. This rangeincludes many specialty honeys, such as

S t r e n g t h t h r o u g h u n i t yBulgarian honey producers sweeten their future through cooperation

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one produced from oak trees, that has adark, rich flavor, to other honey thatcomes from bees that pollinate acaciaand lime trees.

Small-scale marketingBulgarian beekeepers fall into two

general groups. Most producers man-age a small number of hives, thoughthere are a few large producers.

A typical small producer is morethan 65 years old, and usually a retiredwhite-collar professional such as aschoolteacher or bookkeeper. Most ofthese smaller producers have been bee-keepers since their youth. Manyrecount how their first hive was givento them as a wedding present or howthey helped their parents with theirown bee management.

These producers live in smaller ruralcommunities and have hives at their

homes or in theneighboring coun-tryside. Familymembers assistthem with produc-tion activities. Nostandard productionpractice or hive type is used, which leadsto a wide range of quality and volumedifferences. In addition, a single smallproducer could have three differentstyles of hives in the same field.

These small-scale producers markethoney through personal contacts, homesales, and uncoordinated interactionwith brokers. However, in rural com-munities, more honey is produced thanis demanded by local consumers. Theexcess honey is stored, sometimes foryears, in whatever containers the bee-keeper has available until a brokershows up to buy it.

Honey generates a substantial partof their income because inflation haseroded the value of their pensions. Thenumber of hives managed by each pro-ducer is small, often 30 or less. The fewthousand dollars a small honey produc-er can earn, however, has a large eco-nomic impact in rural areas whereannual income is even less than thenational average of $4,000.

Commercial-scale beekeepersLarge-scale or commercial produc-

ers typically manage between 150 and200 hives and production techniquesare more standardized. They tend toknow international production tech-niques and prices. On average, theselarge-scale producers are younger thansmall producers.

Though production is more standard-ized among large producers, marketingpractices vary. A few producers havedeveloped markets and value-addedproducts. Some are even trying to exporttheir production. Yet, the majority oflarge-scale producers use the moreinformal marketing techniques practicedby small-scale producers.

Differences between the two groupscomplicate the marketing situation forall producers. Key issues confronting theBulgarian honey market are perceiveddifferently by each group. On one hand,small producers are concerned withreceiving a “fair” price and having accessto markets outside their local communi-ties. On the other hand, large-scale pro-

Many specialty honeys are produced in Bulgaria because of the country’s agricultural diversity, which ranges from warm Mediterranean zones to cool mountain ranges. Photos by James Matson.

The Riga monastery is one of many architectural treasures found in Bulgaria.


ducers complain of a lack of credit, a lackof quality standards and a lack of marketsfor their larger volumes.

Regulatory and credit systemshamper business

Nonetheless, all producers face theissues of low prices, the theft of hives,access to more markets opportunities,accurate and timely market informa-tion, bear control, and an inadequatelegal framework. Bulgaria as anemerging market-oriented economy isstill creating the legal structure need-ed to foster business transactions. Inaddition, regulations only establish aminimum quality for honey, but donot distinguish between qualitygrades. There are no mechanisms tofinancially punish producers or bro-kers that deliberately adulterate hon-ey, which negatively impacts the wholehoney industry.

Another challenge facing beekeepers— especially large-scale producers — isaccess to adequate credit. Agriculturalenterprises are regarded as old-fashionedby urban Bulgarian lenders. A farm cred-it system, where lenders are familiar withproduction practices, does not exist. Thefew producers who can obtain credit payback more than 150 percent of theamount borrowed annually.

Seeking international expertiseAgainst this backdrop, the Bulgarian

Beekeepers Union has sought the assis-tance of international agencies such asthe USDA or ACDI/VOCA (a non-profit development organization). Rep-resentatives of these agencies have pro-vided advice on ways to improve theBulgarian legal and financial frame-work. And they coordinate their workwith the Bulgarian government officialsto implement necessary local andnational changes.

The producers recognize that animprovement in the institutionalframework represents only a partialsolution. The margin between thefarmgate price and the price paid bythe final honey consumer is quite wide.Consumer prices often are as much asfive times higher than the farmgateprice.

In an attempt to retain more incomefor producers, the Beekeepers Unionassisted in the formation of the cooper-ative Agropchel SA. It is a separatecommercial entity that operates onbehalf of its 700 members across thecountry. This supply and marketingcooperative for producers of honey andrelated products was organized in 1997and was capitalized with 50,000 stockshares. Agropchel sells production

inputs and then markets the honeyproducts.

As with many start-up businesses,the cooperative has worked hard toimprove its bookkeeping systems. Ithas also instituted production and qual-ity standards.

But designing a marketing plan thatgenerates sufficient income for mem-bers and the capital necessary forfuture expansion is a major problem itconfronts. Other issues managementfaces include the guarantee of a consis-tent, quality production and a focus onthe right value-added products.

Some producers also view the coop-erative as a purchaser of last resort. Toconfront this problem, Agropchel isinstituting marketing agreements withproducers. In addition, a regional ware-house collection system and marketsegmentation for certifiable organichoney are being considered.

Bulgarian beekeepers face many chal-lenges in their transition to a consumer-driven market system. In their response,they are heeding the wisdom of theirmedieval king. By uniting to improvethe situation for the industry as a wholeand joining together to form commer-cial cooperatives, they are creating forthemselves a sweeter future. ■

The typical Bulgarian beekeeper is usually a retired, white-collar professional.


F o r e i g n a f f a i r sUSDA Foreign Agricultural Service promotes U.S. agriculture abroad

By Karl HamptonUSDA Foreign Agricultural Service

re U.S. agricultural inter-ests represented overseas?Does it matter whetherthey are or not? The

answer to both questions is a resound-ing “yes,” says Timothy J. Galvin,administrator of USDA’s Foreign Agri-cultural Service (FAS). “FAS representsthe diverse interests of U.S. agribusi-ness — from farmers to food manufac-turers — abroad,” Galvin says. It alsocollects, analyzes and disseminatesinformation about global supply anddemand, trade trends and emergingmarket opportunities.

The goal of FAS is to improve mar-ket access for U.S. products. To do this,the agency implements programsdesigned to build new markets and tomaintain the competitive position ofU.S. products in the global market-place. FAS also carries out food aid andmarket-related technical assistance pro-grams, as well as operates a variety ofCongressionally mandated import and

export programs. Under the terms of a recent memo-

randum of understanding, FAS will alsobe working closely with the USDARural Business-Cooperative Service tohelp develop export marketing plansfor cooperatives that wish to sell agri-cultural goods overseas (see sidebar,page 16).

Why U.S. exports matterEstablished in 1953, FAS has

employees in about 70 overseas officescovering more than 130 countries.These offices link foreign buyers withpotential suppliers in the United States.They also assist U.S. exporters inlaunching products in overseas marketsthat are often characterized by differentfood preferences, social customs andmarketing systems.

In 1999, U.S. agricultural exportstotaled $49 billion. A slight increase inexport value is expected this year.

Overseas markets account for one-quarter of farm cash receipts.According to USDA’s EconomicResearch Service, each export dollar

creates another $1.28 in supportingactivities to process, package, ship andfinance products. This means that agri-cultural exports currently generate$112 billion in total economic activity.About 750,000 jobs are tied to agricul-tural exports as well.

Market developmentFAS programs help U.S. exporters

develop and maintain markets overseasfor hundreds of food and agriculturalproducts, ranging from bulk commodi-ties to brand-name supermarket items.Promotional activities are done primar-ily in cooperation with nonprofit agri-cultural trade associations, companiesthat agree to plan, manage and con-tribute support staff and money. Thelargest of FAS’ promotional programsare the Foreign Market DevelopmentCooperator program (FMD) and the

Market Access Program(MAP). In addition,FAS sponsors theUnited States’ partici-pation in several

major trade showsand a num-

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ber of industry exhibitions overseaseach year.

International trade policy FAS coordinates and directs USDA’s

international trade agreement pro-grams and negotiations, working close-ly with the U.S. Trade Representative’soffice. International trade policyexperts within FAS help identify — andwork to reduce — foreign trade prac-tices that discourage U.S. farm exports.

Statistics and market information FAS collects global crop and live-

stock production data andimport/export information from itsattaches, ag traders, remote sensingsystems and other sources. FAS usesthis information to prepare productionforecasts and assess export marketingopportunities, as well as track changesin policies affecting U.S. agriculturalexports and imports. FAS publishesnearly 200 commodity reports per yearthat present a world picture of produc-tion, consumption and trade flows forabout 100 crop and livestock commodi-ties. These reports and much moreinformation are just a click awaythrough the FAS homepage atwww.fas.usda.gov

Commercial export financing FAS provides exporters with short-

and intermediate-term commercialfinancing support through CommodityCredit Corporation export credit guar-

“There is no higher priority for USDA than working toensure the long-term survival and economic well-being ofAmerica’s small- and medium-size family farms,” AgricultureSecretary Dan Glickman said while announcing two new stepsto help small farmers and ranchers find better ways to marketand export their products. “Expanded export opportunities andimproved marketing offer tremendous opportunities to boostsmall-farm incomes during this time of depressed prices.”

USDA will provide $500,000 to help small farmers developnew ways to market their products, including direct selling torestaurants and institutions, agri-tourism and pick-your-own

farms. Under USDA’s Sustainable Agriculture Research andEducation Program, the University of Vermont, University ofNebraska, University of Georgia and Utah State University willselect and assist specific new marketing projects that willbenefit smaller farms.

In addition, USDA will offer technical assistance to helpsmall farmers and ranchers form cooperatives to export cropsand livestock to international markets. Loans are available tohelp finance the development of value-added processing atexisting cooperatives. ■

USDA extends more help to small farms

Overseas markets account for a quarter of farm cash receipts in the United States and about 750,000 U.S. jobs are tied to agricultural exports.


antee programs. These programs pro-tect U.S. exporters or financial institu-tions against risk if an importer’s for-eign bank fails to make payment. TheGSM-102/103 programs are designedto expand and maintain foreign mar-kets for U.S. agricultural commodi-ties, and may help developing nationsmake the transition from concession-al financing to cash purchases.

The Supplier Credit GuaranteeProgram guarantees payments onpromissory notes from importers fora percentage of the face value up to180 days. And the Facility GuaranteeProgram provides payment guaran-tees to facilitate the financing ofmanufactured goods and servicesexported from the United States toimprove or establish agriculture-related facilities in emerging markets.

Concessional sales The United States is one of the

world’s largest food-aid donors. Overthe years, donated U.S. food has oftenmeant life or death to victims of earth-quakes, floods, droughts and civil strife.The administration of U.S. food aidprograms is shared by the U.S. Depart-ment of Agriculture (USDA) and theAgency for International Development(USAID). USDA has available threechannels for providing food aid: thePublic Law 480, Title I program, theFood for Progress program (FFP), andthe Section 416(b) program.

Agricultural linkages International cooperation and

development activities enhance thecompetitiveness of U.S. agricultureand preserve natural resource systems.These efforts help U.S. agriculturegain access to emerging technologiesand international research, both ofwhich are critical to creating newproducts, practices and markets. FASalso shares U.S. agricultural knowl-edge and assists low- and middle-income countries in building stableeconomies to battle hunger and pover-ty while increasing their imports of U.S.agricultural products. FAS collaborates

with USAID, other government agen-cies, foreign governments, internationalorganizations, universities and the pri-vate sector to achieve these goals.

For more information about FAS

and its multi-faceted programs, visit itswebsite at: www.fas.usda.gov, or con-tact the Office of Outreach at 202-720-7420, fax 202-205-9728 or e-mail [email protected]. ■

A global marketplace means consumers anywhere want products from everywhere. USDA’s ForeignAgricultural Service publishes nearly 200 commodity reports per year that present a world picture ofproduction, consumption and trade flows for about 100 crops and livestock commodities.


G o i n g g l o b a lExport certificates a valuable tool helping co-ops tap overseas markets

Alan BorstAg EconomistUSDA Rural DevelopmentRural Business-Cooperative Service

hat tools allow busi-nesses – in particular,cooperatives – to worktogether to market

products overseas? As businessesincreasingly compete in a global econ-omy, it’s critical they understand the“ins” and “outs” of U.S. regulationsthat can help them avoid antitrust liti-gation and capture higher export earn-ings.

Agricultural cooperatives havejoined with cooperative- and investor-owned competitors to form jointexporting groups throughout the past100 years. These export groups havebeen able to capture economies of size,to spread export marketing risks andcosts across all members, and toincrease each group’s ability to dealwith foreign importers which are fre-quently organized as buyer cartels orstate trading enterprises. However,such cooperative efforts may be cur-tailed or not even undertaken becauseof the threat of costly antitrust litiga-tion.

Possible antitrust plaintiffs caninclude competitors who are outsidethe group, farmers who supply eithermember or non-member firms, tradingcompanies or other marketing interme-diaries which have some commercialrelationship with the group, state attor-neys general, Federal antitrust regula-tors, or even disgruntled firms fromwithin the group. The threat ofantitrust litigation is serious, even if the

case is weak, because the lawsuits areamong the most costly. Cooperativeexecutives must consider the time andresources that could be tied up and theprospect of paying triple damages ifthey are unsuccessful in defending alawsuit. Nearly all antitrust cases arefiled by private plaintiffs.

Export trade certificate of reviewU.S. policy makers have long recog-

nized the benefits of horizontal exportcoordination on member export earn-ings and competitiveness, and theyhave promoted it through the grantingof limited antitrust exemptions —notably the Webb-Pomerene Act(WPA) of 1918. Agricultural coopera-tive members are also covered by theCapper-Volstead Act (CVA) of 1922,which grants limited protectionsagainst antitrust litigation in bothdomestic and foreign joint marketingoperations. By the early 1980s, U.S.policy makers had concluded that theWPA protections were inadequate, andthus passed the Export Trade Certifi-cate of Review (COR) antitrust pre-clearance program as Title III of theExport Trading Company Act of 1982.

The COR program is administeredby the U.S. Department of Com-merce’s Office of Export Trading Com-pany Affairs. Certificates are issued bythe Secretary of Commerce, with theconcurrence of the Attorney General.This program allows U.S. exporters tosubmit specific joint export plans toCommerce and the U.S. Departmentof Justice’s Antitrust Division. Certifiedfirms or associations are provided withimmunity from federal and state gov-ernment antitrust suits with regard to

approved export conduct. (It is impor-tant to note that the COR programdoes not protect holders from foreignantitrust litigation.) In addition, certi-fied exporters receive the followingprocedural advantages related to pri-vate antitrust actions.

• There is a presumption that certi-fied export conduct complies withU.S. antitrust laws. Plaintiffs bearthe burden of proving either thatthe agencies erred in their initialissuance of the certificate or thatconditions have changed so that anoriginally correct certificate is nolonger correct.

• If a certificate holder is foundliable, its liability is reduced fromtreble to single damages for dam-ages resulting from the certifiedexport conduct.

• If the certificate holder prevails,it may recover attorney’s fees.

• Finally, there is a shorterstatute of limitationswithin which plaintiffscan bring anantitrust action(relative to thatfound in otherU.S. antitrustlaws).

W

Additional COR advantagesCooperative exporters seeking pro-

tection or clarity regarding antitrustexposure have various options fromwhich to choose, including the WPA,the CVA, and the Business Review Let-ter (BRL) programs at the JusticeDepartment and the Federal TradeCommission. Depending on theexporters’ needs, the COR programmay provide the following additionaladvantages over some of the otheralternatives.

• WPA only covers joint exportersof goods; COR allows for coverageof both goods and services.

• WPA is limited to export associa-tions; COR immunizes one ormore firms in any organizationalconfiguration.

• WPA associations are limited toexporting; COR exporters mayconduct import or domestic busi-ness, though only their exportbusiness is covered.

• WPA is ambigu-ous lean-

ing toward negative on exclusivecontracting arrangements; CORcould immunize them.

• WPA is a general exemption;COR immunizes specific jointexport activities through a pre-clearance procedure, which pro-vides greater certainty.

• WPA, CVA, and BRL do not pro-vide any of the procedural advan-tages allowed for in COR cover-age.

• BRL is a specific but non-bindingstatement of the Department ofJustice’s position on reviewed con-duct; COR pre-clearance is bind-ing on the Justice Department andother potential public plaintiffs(unless circumstances havechanged).

• CVA covers only joint marketingactivity of farmers; COR potentiallycovers any exporting firm, includinginvestor-owned co-op competitors

and other related channelmembers.

The COR program is voluntary andthere are no application fees. Althoughmany applicants use legal counsel, theapplication form is intended to be easyto complete by the applicant, and theOffice of Export Trading CompanyAffairs is available to provide pre-appli-cation counseling to interested appli-cants at no cost. Decisions on certifica-tion are done, except in extraordinarycircumstances, within 90 days from theday a completed application is accept-ed. Analysts, economists, and attorneysfrom both the Commerce and JusticeDepartments review and process theapplications, with Commerce being thecontact point for the applicant. Theprocess is intended to be user-friendlyand additional information from appli-cants is normally sought through con-ference calls.

Protection at a modest costThe COR program has been criti-

cized for failing to meet inflated expec-tations regarding its macroeconomicimpact that surrounded its 1982 pas-sage by Congress. But, critics are mis-

guided if they assess the program’ssuccess or value by whether it

has had an impact on thetrade deficit or U.S.

unemploymentrates.

It is bestto consider

Illustration courtesy Exlaw.com.



this program as one useful tool, amongmany, available to U.S. exporters. Thesuccess of any export venture dependson business realities and the effortsexport partners put into the venture.Nevertheless, if the threat of antitrustliability is of any concern, the CORprogram offers some certainty and pro-tection at a relatively modest cost. Itshould be noted that the costs to thegovernment for running this programare, likewise, modest (particularly whencompared with the potential liability toexporters using it). In addition, obtain-ing a COR sometimes serves as a cata-lyst for renewed export activities bycertificate holders.

Congress made agriculturalexporters a major target group for thisprogram. In Title I, Section 102 (a) (5)of the Export Trading Company Act of1982 Congress stated:

“The Congress finds that...althoughthe United States is the world’s leadingagricultural exporting nation, manyfarm products are not marketed aswidely and effectively abroad as theycould be through export trading com-panies.”

An important target sub-group ofthese agribusinesses were agriculturalmarketing cooperatives. In 1986, JanicePayt, attorney advisor at the Com-merce Department’s Office of theAssistant General Counsel for TradeDevelopment, made the case in theJournal of Agricultural Taxation & Lawthat cooperatives could benefit fromthe COR program to strengthen theirmarket power:

“It may be advantageous to organizean ETC [export trading company] as acooperative, and cooperatives can, asmembers, form or otherwise participatein ETCs. Generally, cooperatives canuse the ETC Act to obtain antitrustprotection not available under the CVAalone and can combine the two statutesto obtain optimum protection forexport activities.... To obtain optimumbenefits from joint exporting, coopera-tives may desire to enter into arrange-ments with nonproducers. Sucharrangements fail to qualify for theCVA [Capper-Volstead Act] exemption,

inasmuch as the CVA requires all mem-bers of a cooperative to be agriculturalproducers. For example, courts haveheld that a nonproducer processor isnot an eligible agricultural producerwithin the meaning of the CVA.... Byusing Title III certification, coopera-tives can obtain immunity for theirexport activities with noncooperatives,while still retaining the CVA exemp-tion for domestic (and foreign) cooper-ative activities.”

Co-ops use antitrust pre-clearanceIt should also be noted that, in the

1996 Farm Bill, Congress encouragedthe U.S. dairy industry to “establishand maintain one or more export trad-ing companies under the [ETC Act]”and authorized the Secretary of Agri-culture to provide his advice and assis-tance as necessary.

Agricultural marketing cooperativeshave used the Export Trade Certificateof Review antitrust pre-clearance pro-gram for many purposes. Over 40cooperatives have been certified in 18different export groups since the firstcertificate was issued in 1983. Muchhas been written about the potentialbenefits which COR offers to prospec-tive joint exporters, while little hasbeen said about the experiences whichcertified firms have had with this pro-gram.

A series of interviews were conduct-ed with executives from cooperativemembers of a majority of certified jointexport marketing groups with coopera-tive membership. Questions were askedabout how COR pre-clearance influ-enced their export grouping activities,and what limits existed to undertakingthe certified conduct. Some coopera-tives reported that certification played acentral role in enabling their export-grouping venture by resolving seriousantitrust threats which would have oth-erwise stopped the venture. Othersreported that the certification was valu-able as inexpensive legal insurance, butnot absolutely needed for their ven-ture’s joint exporting activities.

Most of the certified groups withcooperative membership failed shortly

after start-up or have operatedsporadically and at the mar-gin, with very limited salesvolumes. A few of the certifiedgroups, however, have beenvery successful in their jointexporting activities. These aregroups which, not coinciden-tally, have heavily used theircertification. The threat ofantitrust litigation tends to beproportional to the potentialmarket power the exporterscould collectively exercisethrough the group. Thegreater the potential marketpower, the greater the poten-tial damages to be wonthrough antitrust litigation.

There are natural checks tothe exercise of joint exportmarket power among certifiedU.S. firms. Certification hasalmost always been sought forjoint exporting to new or unde-veloped markets. There are alsothe strong vertical market linksbetween these established U.S.exporters and their importing partners,who do not wish to confront horizon-tally coordinated U.S. exporters. Noexamples were found of competingexporters initiating horizontal coordi-nation with respect to establishedexport markets. Further, once verticalrelationships were developed betweenindividual U.S. exporters and foreignimporters, horizontal coordinationtended to decline.

Business relationships importantA large proportion of the certified

joint exporting activities faced littleactual threat from potential antitrustlitigation. Nevertheless, there wereindustries with painful memories ofpast antitrust actions, and others with-out a history of antitrust litigation, perse, but where relations among competi-tors were otherwise strained and litiga-tion of other sorts had been threatenedor taken. In these situations, certifica-tion enabled even low-risk joint mar-keting activities by providing assuranceto highly risk-averse exporters.


Most of the respondents reportedthat the importers with whom theydealt were also horizontally coordinat-ed, either as state trading enterpriseswith some measure of publicly con-ferred authority, or as buyer cartels thatpresented a united marketing front.Thus certification enabled the exerciseof countervailing power against coordi-nated importers.

The business culture among the jointexporters was another determinant oftheir capacity to actually undertake theactivities for which they were certified.The potential efficiencies some certifiedgroups possessed went unused when dis-trust and suspicion fueled rivalry overcooperation. Conversely, whereexporters knew and trusted each otherwell, some export activities were success-fully implemented.

Most of the certified export groupswere coordinated by a commodity asso-ciation, which usually established a dis-tinct entity to administer the joint mar-keting activities. This served thepurpose of preserving the commodityassociation’s eligibility to receive exportpromotion funds and services.

One area in particular where certifica-tion has proved useful is in legitimatingpolitical relationships between U.S. com-modity associations and foreign govern-ments. Certification helped U.S. com-modity groups to: 1) administer tariffexport quotas granted by a foreign eco-nomic union; 2) negotiate a suspensionagreement to terminate an anti-dumpinginvestigation brought by a foreign gov-ernment; and 3) implement phyto-sani-tary requirements imposed by importing-country agricultural officials. This hasallowed commodity groups to take activeand coordinated roles in governing theirexport markets on important issues.

Several cooperative executivesreported that certified joint exportingwas undertaken in conjunction with oth-er horizontal coordination, as exercisedunder Federal marketing orders, infor-mation-sharing cooperatives, and bar-gaining cooperatives. Some of these oth-er entities provided financing and othersupport for the joint exporting efforts.

Some COR program applicantswere third parties, such as economicdevelopment specialists or trade associ-ation staffers, who were seeking to

facilitate horizontal coordination fromoutside the industry. These ventureswere typically less successful in pro-moting joint exporting than were cer-tificates directly sought by exporters.

Overall satisfaction with CORThe COR program is a tool which

has been used to free several coopera-tives from antitrust fears. Some coopera-tives have been protected from the activethreat of non-member farmer lawsuits,while others have been freed from thethreat of litigation from other sub-sectorstakeholders from outside the group.However, antitrust litigation was treat-ended in one instance when a certificateholder used its certificate to protect itsjoint exporting arrangement with a dis-gruntled cooperative supplier that hadearlier threatened the holder withantitrust legal action.

Most cooperative and ETC execu-tives reported receiving certification foralmost all of their joint exporting plans,although a few compromises were nec-essary. All expressed appreciation forCommerce’s COR staff, and they hadno complaints about the overall processof obtaining and maintaining their cer-tification. Respondents valued the roleof Commerce, which they perceived asbeing business-friendly and as the maincontact point in the process. They alsoview Commerce as the liaison for inter-actions with Justice, which is perceivedas less business-friendly because it is anenforcement agency.

In summary, cooperatives and thecertified export marketing groups towhich they belong have been generallysatisfied with the protections providedby the COR program against the threatof potential antitrust litigation. A major-ity of cooperative exporters have notsought certification, and many of thosewho obtained it have never effectivelyused it. But for those who have usedtheir certification to resolve activeantitrust threats or to assure otherwiseanxious competitors, and who have sub-sequently engaged in joint export mar-keting activities, the COR program canbe fairly credited with having enabledtheir higher export earnings. ■

Over 40 cooperatives have been certified in 18 different export groups under the COR antitrustpre-clearance program. Research shows they are generally satisfied with the protection it pro-vides against antitrust litigation and how that enables higher export earnings.


Co-op type: Founded in 1997, Mt.Pride is the home of USDA-inspectedrabbit, goat and lamb growers.

Service provided: With the help oflocal cooperative extension agents,members are especially developingrabbit production practices,experimenting with new products, andcoordinating their efforts to supplyover 1,500 pounds of rabbit fryers tomajor supermarket chains.

Production Coordinator: PaigeDopson, program assistant, GarrettCounty Cooperative Extension Service,Maryland, who also serves as treasurer.

Board: A 10-member board of smallproducers governs the co-op. Itsofficers include President BarbaraHarvey, Moatsville, W.V.; VicePresident Charlotte Koontz, Philippi,W.V.; and Secretary Ieda Darnell,Bruceton Mills, W.V. Membership

shares are $50 each.Geographic area: There are manymembers in the cooperative stretchingfrom Maryland, Virginia and NorthCarolina west to West Virginia andPennsylvania. However, fewer than 50growers supply the majority of meatprocessed atCountry PrideMeats,Friendsville,Md., one of onlythree USDA-inspected rabbitprocessors inthe country.

Product highlights: Rabbit productionhit an all-time high in the war years ofthe 1940s. With meat scarce, families inrural and urban areas supplemented theirdiets with home-grown rabbit. In thelate 1940s and early 50s, domestic rabbitwas common in meat departments in

certain areas of theUnited States and itsold for about the sameprice as chicken. Whilethe poultry industrymoved ahead inproduction andmarketing techniques,the rabbit industrylagged. Now Mt. Pridemembers are marketingwhole fryers, taken at4.5 to 6 pounds, liveweight.

Cooperative mem-bers also market goatand lamb. However,that meat isn’t marketedthrough retail store out-

lets under the cooperative’s own label.The rabbit meat has been sold in about400 Shop N Save, Foodland, CountryMarket and SuperValu supermarkets inthe membership region, as well as someOhio stores.

Recent developments:James I. McNitt, anoted rabbitresearcher atSouthernUniversity, Baton

Rouge, La., hasfound that consumers

want rabbit parts whileonly whole rabbits are

usually available. Eventhough whole fryers are the mainstay,Mt. Pride members are consideringother types of value-added products asrabbit supplies increase. Extensionagents Ron Swope, Marion County,W.V.; Jim Simms, Garrett County,Md.; and Melanie Barkley, BedfordCounty, Penn.; are helping developbasic rabbit production practices.Members and their processor areexploring both smoked and marinatedrabbit; experimenting with productssuch as “rabbit wings,” using theforeleg in a sauce; and studying thepossibility of rabbit sausage. The co-op is also networking with the meatgoat industry to organize a channelfor direct marketing of goats andlambs to processors so more moneycan be returned to farmers.

For more information: Mt. PrideCooperative, Inc., 1916 Maryland Hwy.Suite A, Mt. Lake Park, MD 21550;(301) 334-6960; fax 334-6961; orwww.mtnpride.com.

A C L O S E R L O O K A T . . .

M t . P r i d e C o o p e r a t i v e I n c .Mt. Lake Park, MD

In-store food sampling by co-op members relates to consumersthat rabbit is USDA inspected, 95 percent fat-free, versatile andhas an exceptional gourmet flavor.Photos courtesy Mt. Pride Cooperative Inc.


By Perry Letson Assistant Vice President ofCommunicationsACDI/VOCA

oreign aid” is a termthat often provokesintense debate. How-ever, besides benefit-

ing the needy, U.S. foreign assistance isa wise investment in our own economicfortune. This is especially true when theaid is devoted to agricultural develop-ment. American agriculture must lookbeyond current difficulties and supportstrategic agricultural aid overseas.

It is well established, though coun-terintuitive, that broad-based agricul-tural growth in developing countriesboosts ag imports from the UnitedStates. When people in developingnations earn disposable income, theyspend it on improving their diets.According to the International FoodPolicy Research Institute, each dollarincrease in developing-country farmoutput leads, on average, to 73 cents inimports from the United States,including 24 cents of agriculturalimports from the United States.

Agriculture is a critical engine for anation’s economy because, on average,a $1 increase in ag production gener-ates $2.32 worth of growth in the over-all economy. And agricultural assis-tance works: U.S. investments in betterseeds and farming techniques havehelped feed an extra billion people inthe developing world since the early1960s.

Exports: key to U.S. ag successToday, agriculture is the bright spot

in a gloomy U.S. balance of payments

picture. While large global suppliesand weak import demand have inrecent years hurt U.S. farm exports, theFood and Agricultural Policy ResearchInstitute projects that over the next 10years the value of exports will increaseby more than 40 percent. In 1998 Sec-retary Glickman put it succinctly:“Without world markets, the U.S. farmeconomy goes in the tank.”

Wayne Boutwell, former president ofthe National Council of Farmer Coop-eratives and now president of SouthernStates Cooperative, said in 1996 that“over the next 50 years, 94 percent of thegrowth in population-based fooddemand will occur outside the industrial-ized countries. This is where the battlewill be fought for world markets.”

While our traditional agriculturalmarkets in Europe and Japan are matur-ing, developing countries offer accelerat-ed population and economic growth.China’s economy alone is expected totriple in seven years! Unless we want tobe left behind in global competition, the

United States must pursue foreign assis-tance that conforms to the demographicrealities. To the extent the aid is agricul-ture-oriented, it will be more effective ataccomplishing broad-based economicdevelopment and more likely to cultivatenew customers for U.S. farm products.

Agricultural aid in declineYet agricultural aid from all industri-

alized nations plummeted almost 50 per-cent in real terms over 1986-96. TheUnited States is leading the decline.

Fifty years ago, the United Statesprovided almost two-thirds of all theforeign assistance in the world. Nowwe rank last among the 21 industrial-ized nations (according to the Orga-nization for Economic Cooperationand Development) in percentage ofGNP per capita devoted to humani-tarian assistance abroad. In actualdonations, we rank behind Japan,Germany and France – nations withmuch smaller populations than theUnited States. There has been a 40percent erosion in U.S. aid (in realdollars) over the last decade, andwe’ve closed 28 missions of the U.S.Agency for International Develop-ment (USAID) since 1993.

From an agricultural marketingstandpoint, this is folly! Other nations– our competitors – are becomingmore generous and more strategic withtheir aid programs as we shrink fromour rightful role as world leader.

The actual amount of the federalbudget devoted to foreign aid is lessthan 1 percent. According to a Univer-sity of Maryland poll, a majority ofAmericans believe the United Statesspends 15 percent or more of the fed-eral budget on foreign aid. The same

W h y U . S . a g r i c u l t u r e s h o u l ds u p p o r t f o r e i g n a i d

“FJosé Artigas of Farmers CommoditiesCorporation in Egypt on an ACDI/VOCAproject to strengthen Egypt’s grain indus-try. The Des Moines co-op discoveredopportunities in its field of agricultural riskmanagement and today has a thrivingoffice in Cairo. Photo courtesy ACDI/VOCA.


respondents believe the proper amountshould be about 6 percent.

Congressional support for foreignaid has ebbed in recent years. Toomany Americans misunderstand thewin-win aspect of international eco-nomic development and are cynicalbecause past aid in certain casespropped up dictators. In general, weAmericans say we support the idea ofdevelopment and humanitarian assis-tance, and we tend to be generouswhen disaster strikes. However, citizensupport for aid is more a latent valuethan an urgent, activist concern, andCapitol Hill has consequently treated itas a low priority.

A history of success There’s no denying that U.S. for-

eign assistance has had remarkablesuccess. Since the inception of theMarshall Plan in 1947, America hasprovided vital resources, developmentmodels (including cooperative formsof business and banking), and criticalknow-how around the globe. FromFrance, Italy, Germany, Spain andJapan in the post-war era, to Thai-land, Chile and Costa Rica in morerecent years, foreign aid has broughttremendous gains.

In the 1950s and early 1960s, thefour developing countries thatreceived the most U.S. aid wereBrazil, Korea, Taiwan and Turkey.Today, we have over $100 billion intrade with each. Now South Koreaeach year buys U.S. goods that areworth more than all the assistanceprovided to that nation since 1962.

In addition, there have beenastounding benefits to American agri-culture: Wheat varieties with dwarf-ing genes found in Asia as part of aUSAID program are now grown onalmost two-thirds of the area underwheat cultivation in the UnitedStates.

Co-ops: a natural at internationaleconomic development

Even with the gains, 800 millionpeople are still chronically hungry,and the world population is increasing

by approximately 80 million per year.U.S. farm cooperatives and farm cred-it banks have a proud history of help-ing those in need overseas. CARE,ACDI/VOCA and its predecessororganizations – Agricultural Coopera-tive Development International andVolunteers in Cooperative Assistance– as well as NCBC, NRECA and oth-er organizations have carried theco-op banner to the far corners of theworld, creating prosperity and inject-ing the democratic values and effi-ciency of co-ops where they are mostneeded. Today, with world marketsbeckoning, U.S. farmers can’t affordto be isolationist; they must supportstrategic foreign aid.

There are many ways of looking atforeign assistance. It’s investing inpeople so that they can join the globalinformation and economic order. It’sleveraging the limited resources ofgovernments to build indigenousskills and promote private initiative.Ultimately, it’s a process of makingfriends and creating customers over-seas in stable political environments –customers who have money to spendand look to America as a worthy help-mate and a reliable supplier of qualitygoods.

Ted Turner says, “We cannot savethe United States in the long haulwithout saving the whole world. Wecannot throw up walls at our bordersor set tariffs on imports. We cannotescape environmental degradation ofour foreign neighbors. Why createrefugees when we can cultivate buy-ers?”

Howard Shultz, CEO of Starbucks,adds, “Supporting global developmentis not charity – it’s an investment.And, it’s the right thing to do.”

The new world economy is basedon democracy and trade: currently,American foreign aid, what there is ofit, is becoming more business-orient-ed, and trade barriers are inevitablycoming down. The United Statesmust be engaged overseas to preparefor a future in which more and morecustomers will have names that areharder and harder to pronounce. A

future in which diseases more easilybecome pandemics; a future in whichwe’ll eventually discover that an enor-mous amount of the world’s vitalgenetic diversity is reposed across ourborder in remote rain forests or onmountain terraces.

More than moneySeat-of-the-pants economists may

say that private investment in thedeveloping world has soared in the pastfew years from $30 billion in 1987 tonear $200 billion today and that thismassive infusion of money will make allthe difference. Right? Unfortunately,no. In most cases, it only makes therich richer. The vast majority of thisprivate investment went to a merehandful of nations – less than threepercent went to all sub-Saharan Africa.Private investment will not bring aboutbroad-based global economic prosperi-ty. There must be government and civilsociety intervention to make aid equi-table.

Whether it’s helping to organizesmallholder farmers in Malawi to cap-ture market share from colonial-styleplantations, or teaching marketing tobakers in Romania, or bringing cooper-ative banking back to Poland,people-to-people, privateenterprise-based development assis-tance is inexpensive in the long runespecially if it helps avert crises. Theprosperity it brings will pay off mani-fold for market-hungry American agri-culture.

We, as a people, must not miss theopportunity to be good leaders, to begood businessmen and to be goodperiod. If we’re serious about findingnew markets, about creating newbusiness opportunities for Americancompanies in this competitive envi-ronment, we must recognize that wehave a vested interest in helping thedeveloping world – especially in agri-culture. ■

Opinions expressed by guest columnistsin Rural Cooperatives magazine do notnecessarily represent those of the U.S.Department of Agriculture.


By Beverly L. RotanEconomistUSDA Rural DevelopmentRural Business-Cooperative Service

ith farm commodityprices severelydepressed and thou-sands of producers all

across the nation struggling for theireconomic survival, most farmers couldimprove their odds by belonging to

financially strong marketing and supplycooperatives to add some certainty toan uncertain world. But a cooperative isnot a panacea, and managers and direc-tors need to constantly monitor allaspects of the cooperative operation tomake certain it is returning a good val-ue to its members.

One way to measure the success ofyour farm supply cooperative is tocompare it with the performance ofcooperatives with similar functions

during the past year. Was its perfor-mance higher, lower or about the sameas the average of a cross section of localfarm cooperatives with similar factors?

The two tables below contain aver-age financial data compiled from a sur-vey of 329 cooperatives for 1997 and1998. These include trend and industrynorm comparisons. Fill in the blanksand compare these benchmarks withyour cooperative’s financial data.

So how is your cooperative doing? ■

W

M A N A G E M E N T T I P

H o w D o e s Y o u r L o c a l F a r m S u p p l yC o o p e r a t i v e R a t e ?

Table 1—Compare your farm supply cooperative 1/ with averages for cooperatives with similar functions.

Size (1997) 2, 3/ Size (1998) 2, 3/ Your Measure/Item Unit Small Medium Large Super Small Medium Large Super cooperative

Sell farm supplies only Percent 85 60 41 10 85 60 41 10Total assets Mil. dol. 1.6 4.1 7.4 14.0 1.6 4.3 7.9 15.4Long-term debt Thou. dol. 90.0 342.0 661.2 786.3 88.1 361.7 759.4 1,284.4Total liabilities Thou. dol. 404.6 1,287.0 2,646.5 5,544.1 405.6 1,324.3 2,937.2 6,055.9Total sales Mil. dol. 2.9 7.2 13.3 24.9 2.6 7.0 12.7 26.0Total service revenue Thou. dol. 48.1 204.1 320.1 665.9 56.2 201.7 321.7 686.5Total revenue Mil. dol. 2.9 7.7 14.1 26.5 2.7 7.2 13.5 27.6Net income (losses) Thou. dol. 115.4 335.5 642.2 1,159.2 85.7 300.3 506.8 1,049.4Labor of total expenses Percent 54 51 53 54 54 51 53 55Patronage refunds received Thou. dol. 67.1 184.9 319.5 761.6 70.5 184.2 333.3 790.2Liquidity ratios

Current Ratio 2.39 1.90 1.51 1.42 2.35 1.90 1.40 1.41Quick Ratio 1.42 1.05 0.80 0.71 1.38 1.05 0.75 0.63

Leverage ratiosDebt to asset Ratio 0.11 0.13 0.16 0.18 0.09 0.12 0.17 0.19Debt to equity Ratio 0.08 0.12 0.14 0.09 0.07 0.12 0.15 0.13Times interest earned Ratio 7.37 7.47 6.27 7.30 5.87 6.83 5.37 5.88

Activity ratiosFixed asset turnover Ratio 7.87 6.81 5.86 6.68 6.62 5.97 5.02 5.79Total asset turnover Ratio 1.78 1.76 1.80 1.78 1.57 1.57 1.60 1.68

Profitability ratioGross profit margins Percent 16.99 16.64 18.65 16.12 17.86 18.15 19.56 15.88Return on total assets beforeinterest and taxes Percent 9.12 10.01 10.97 10.57 6.81 8.76 8.30 8.85Return on total equity Percent 10.05 11.87 13.49 13.68 7.20 10.21 10.13 11.22

1/ 100 percent of sales were generated from farm supply sales. 2/ Small = Sales are $5 million or less; medium = over $5 million to $10 million; large = over $10 million to $20 million;

and super = over $20 million. 3/ There were 329 cooperatives surveyed in both years.


Table 2—Compare your mixed farm supply cooperative 1/ with averages for cooperatives with similar functions.

Size (1997) 2, 3/ Size (1998) 2, 3/ Your Measure/Item Unit Small Medium Large Super Small Medium Large Super cooperative

Market farm products andsell farm supplies Percent 6 19 24 19 6 19 24 19Total assets Mil. dol. 1.1 3.7 8.3 16.2 1.1 3.9 8.6 17.4Long-term debt Thou. dol. 27.9 479.4 1,063.2 2,029.7 116.0 571.2 1,117.8 2,094.0Total liabilities Thou. dol. 399.1 1,380.0 3,293.8 8,099.2 342.8 1,467.2 3,381.7 8,594.6Total sales Mil. dol. 2.7 7.9 14.6 34.9 2.5 7.3 14.4 34.3Total service revenue Thou. dol. 60.6 251.3 550.1 1,102.9 65.6 293.8 598.5 1,224.7Total revenue Mil. dol. 2.9 8.4 15.6 36.9 2.6 7.8 15.5 36.4Net income (losses) Thou. dol. 14.3 232.8 377.2 868.3 34.2 233.0 388.1 941.9Labor of total expenses Percent 51 48 51 48 51 49 51 49Patronage refunds received Thou. dol. 27.9 125.8 345.6 634.9 31.8 126.6 365.2 662.6Liquidity ratios

Current Ratio 1.54 1.74 1.44 1.36 2.33 1.70 1.30 1.32Quick Ratio 0.80 1.07 0.81 0.64 1.18 0.94 0.68 0.59

Leverage ratiosDebt to asset Ratio 0.14 0.17 0.20 0.25 0.20 0.19 0.20 0.25Debt to equity Ratio 0.04 0.21 0.21 0.25 0.16 0.24 0.21 0.24Times interest earned Ratio 1.70 4.47 3.61 3.20 2.53 4.68 3.37 3.32

Activity ratiosFixed asset turnover Ratio 11.83 7.39 5.80 7.98 10.29 5.72 5.06 7.19Total asset turnover Ratio 2.49 2.17 1.76 2.15 2.31 1.87 1.66 1.97

Profitability ratioGross profit margins Percent 11.17 12.37 14.51 13.45 12.47 13.31 15.58 15.10Return on total assets beforeinterest and taxes Percent 4.00 8.96 6.82 8.35 5.83 8.03 6.75 8.36Return on total equity Percent 2.03 10.25 7.49 10.70 4.73 9.66 7.37 10.64

1/ 50 to 99 percent of sales were generated from farm supply sales. 2/ Small = Sales are $5 million or less; medium = over $5 million to $10 million; large = over $10 million to $20 million;

and super = over $20 million. 3/ There were 329 cooperatives surveyed in both years.

Land O’Lakes buys butter businessLand O’Lakes Inc., Arden Hills, Minn., recently announced its purchase of Madison Dairy, a 95-year-old, family-owned

business in Wisconsin’s capital city. The butter plant is the city’s 18th largest business, employing 80 and tallying $290 million inrevenues last year. Madison Dairy, owned by the Steinhauer family, produced 15 percent of the nation’s butter in 1999. LandO’Lakes controls about 33 percent of the U.S. butter market. The deal will allow the co-op to add a major production facility toits current roster of butter plants in Faribault, Minn.; Carlisle, Pa., Kent, Ohio; and Tulare, Calif.

In other news involving LO’L:•LO’L and Alto Dairy Cooperative are studying whether to construct a jointly owned cheese plant in Wisconisn that would

be the state’s largest. It could handle up to 6 million pounds of milk daily — or about 600,000 pounds of cheese a day.•LO’L and Cooperative Business International Inc. have formed Specialty Grains LLC, a partnership which will integrate

seed contracting, and the marketing and delivery of specialty grains to overseas customers. The key to Specialty Grains will bean integrated, formalized contract production system. The original focus of the venture is expected to be identity preserved soy-beans and white corn.

•LO’L, Cenex Harvest States Cooperatives and Farmland Industries announced that Agriliance LLC will be the name of theagronomy marketing joint venture between the three regionals. It maintains marketing and sales offices in St. Paul, Minn., andKansas City, Mo. Agriliance was originally proposed in anticipation of a unification between Cenex Harvest States and Farm-land which did not receive the necessary member approval. This alliance is not contingent on a Farmland and Cenex HarvestStates unification. Agriliance will be the largest North American crop input provider; marketing approximately 15 million tonsof crop nutrients, $1.7 billion of crop protection products, and $300 million of Croplan Genetics seed.


Welch’s sales soar; Pokeman coming!

For many ag co-ops, 1999 was a yearthey’d rather forget. One exception:Welch Foods Inc. of Concord, Mass.Thanks to new products, wider distrib-ution and studies that tout the healthbenefits of grape juice, the marketingarm of the National Grape CooperativeAssociation Inc., recently out-per-formed much of the industry. Over thepast eight months, Welch’s has seenmonthly sales running more than 20percent above the previous year’s levels,said Daniel P. Dillon, Welch presidentand CEO.

Most members grow their grapes inMichigan, New York, Ohio, Pennsylva-nia, Washington state and Ontario. Asgrapes thrive, many other farm prod-ucts are hurting. The co-op may bethriving because it’s doing a good jobfulfilling its purpose: maximizing prof-its and preserving the long-term liveli-hood of members by stimulatingdemand through marketing efforts and

advertising campaigns. Welch’s ads tar-get families and feature cute kids. Newmarket efforts include a sponsorship ofI-Village, a Website that caters towomen. And soon Pokemon characterswill be enlisted in a Welch’s promotion.Also stimulating demand is medicalresearch that Welch’s has supported.This research claims that white grapejuice may be the easiest juice for ayoung child to digest and that purplegrape juice is as good for the heart asred wine.

What’s really impressive about lastyear, according to Dillon, is that aboutone-third of sales came from new prod-ucts introduced within the past fiveyears; in the early 1990s, new productsaccounted for about only 10 percent ofoverall sales.

Merger creates Evergreen Co-opMcLean County Service Co. mem-

bers recently attended their final annu-al meeting, followed by the first boardmeeting of Evergreen FS, created

through a combination of McLeanCounty Service and Woodford FS inIllinois. Farmer-members of the twoGrowmark Inc.-member cooperativeselected Dan Kelley, Normal, boardpresident; Rick Dickinson, Congerville,vice president; and Darwin Builta, Bell-flower, secretary-treasurer. Otherdirectors on the new board includeMark Newmann and Kent Hodel, bothof Metamora; Irvin Bane, Bellflower;Russel Johnson, Chenoa; Jerry Wisted,McLean; Lynn Rader, Bloomington;and Paul Duzan, Colfax.

Evergreen FS serves 4,200 farmers,providing them fuel, fertilizer, LP gas,agrifinancing, precision farming andgrain marketing and storage services.The co-op employs 250 people, with itsmain office in Bloomington. WoodfordFS posted 1999 sales of more than $11million. McLean County Service com-pleted its third-best year with salesexceeding $77.8 million. Doug Oehler,former McLean County Service gener-al manager, remains in that position,

N E W S L I N E

Welch’s new Pokeman jelly jars are sure to be a big hit with the public. Photos courtesy Welch’s.


while Bob Eichelberger, former Wood-ford FS general manager, takes over asassistant manager of operations.

Ag Council salutes Steve Easter Steve Easter, who recently retired

after a long career as vice president ofmember and government relations forBlue Diamond Growers, was honoredwith the Co-op Career ProfessionalAward for 2000 during the 81st annualmeeting of the Agricultural Council ofCalifornia in Sacramento. Easter wassaluted for his 32 years of service toagricultural cooperatives.

He continues to serve as a directorof the Almond Board of California andis past president of the Almond Hullersand Processors Association. Easter isalso a former chairman of the Agricul-tural Council of California and mem-ber of the Advisory Committee onHorticultural Trade to the Secretary ofAgriculture and the U.S. Trade Repre-sentative. He also served as chairman ofthe American Institute of Cooperation.

Rural Utilities sells debt securitiesNational Rural Utilities Cooperative

Finance Corp. (NRUCFC), Washing-ton, D.C., filed to sell up to $300 mil-lion in debt securities. Combined with$100 million in previously registeredsecurities, the offering is worth $400million, according to the self registra-tion filed with the Securities andExchange Commission.

The non-profit Herndon, Va.-basedcooperative provides financing to sup-plement the loan program of the U.S.Agriculture Department’s Rural Utili-ties Services. The proceeds from theoffering will be added to NRUCFCgeneral funds which will be used tomake loans to members, repay debt,refinance long-term debt and othercorporate purposes.

NRTC praises House Ag Committeefor moving to close ‘digital divide’

The U.S. House Agriculture Com-mittee voted in mid-February to bringthe benefits of local satellite TV broad-casts – and perhaps high-speed Internetservice – to the half of America over-looked in last year’s Satellite Home

Viewer Improvement Act (SHVA).Bob Phillips, president and CEO of

the National Rural Telecommunica-tions Cooperative (NRTC) hailedapproval of the “Rural Local BroadcastSignal Act” by the House Ag Commit-tee as “a major step toward bridgingthe ‘digital divide’ looming in ruralAmerica.” Phillips’ comments came fol-lowing a 41-0 vote by the committee toapprove the bill, which contains $1.25billion in federal incentives to assistnon-profit organizations in providinglocal broadcast television services torural areas.

“The Committee sent a clear mes-sage – rural Americans are not second-class citizens and they deserve access tothe same news and information servicesas urban Americans,” Phillips said.“H.R. 3615 is the right bill at the righttime to address the lack of access tobroadcast signals in vast areas of thecountry,” he said.

Phillips praised the co-authors ofthe legislation, Reps. Bob Goodlatte (R-VA) and Rick Boucher (D -VA) alongwith Rep. Charles Stenholm (D -TX)for moving quickly to provide theincentives. “They understand the plightof rural consumers, and they have

crafted a bill that not only offers signif-icant incentives to address the crisis,but a bill that puts the right agency —the Department of Agriculture’s RuralUtilities Service (RUS) — in charge ofadministering the local broadcast signalprogram,” he said. “The telecommuni-cations loan guarantee program admin-istered by RUS has a 100 percentrepayment record – not one dime oftaxpayer money has ever been used tocover a loan default,” he said.

SD co-op plans egg production plantDakota Layers Cooperative received

a $48,000 grant to plan an egg-produc-tion plant that would house 750,000hens. The money comes from theSouth Dakota Governor’s Office ofEconomic Development to study thefeasibility of a plant north of Flandreau,reports Scott Ramsdell, president andfounder of the farmer-owned coopera-tive.

The $41.5-million plant would cre-ate 15 jobs. It will use 650,000 bushelsof corn and tons of soybeans. The co-op has held a public meeting to discussthe plan and has taken an option to buya quarter section of land. The plantwould consist of 10 barns, and the site

Minnesota power alliance establishedMinnkota Power Cooperative, Inc., will work with Minnesota Power,

Inc., and Great River Energy in an alliance to optimize about 4,000megawatts of generation assets. The alliance will also combine the powersupply assets and customer loads for all three companies and will result ina larger resource base to help mitigate risk in volatile power markets.MPEX, a division of Minnesota Power, will provide power trading, leastcost supply and risk management services for the combined operations.The companies plan to complete alliance details by summer.

“This is the right thing to do in today’s energy marketplace,” saidDave Loer, president and CEO of Minnkota. It is a consumer-ownedgeneration and transmission cooperative serving 12 distribution co-ops.Its service area, approximately 35,000 square miles, is in northwesternMinnesota and eastern North Dakota with a population of 300,000. Itsgenerating facilities are among the lowest-cost producers of electric ener-gy in the country.


would feature a processing plant tograde, clean and package eggs. In addi-tion, a mill is being proposed to con-vert locally grown corn and soybeansinto feed. Ron Wheeler, the state’s eco-nomic development commissioner, saidthe plant would be a boon to Flan-dreau. Local businesses ranging fromelectric cooperatives to main streetbusiness should see increased business,he said.

Small Poultry Processor Co-opPlanned

Karen Machetta, a central Missouriwoman who uses organic methods toraise free-range chickens north ofColumbia, says a poultry processingplant would let small producers com-pete with large corporations. Farmerswould be able to bring birds in for pro-cessing and USDA inspection. Hereffort received a boost with a $7,180grant for consultants’ services for theproject. The money came from theMissouri Value-Added Grant Programof the state’s department of agriculture.

Last year, Machetta received$10,000 to study demand for the plant.She had hoped the latest grant wouldbe enough to build the plant, but pro-gram manager Tony Stafford said capi-tal expenses are ineligible. One possi-bility is for farmers to organize acooperative. Larry Kieffer, a farmer inMacon, has been working on such aproject but said his efforts are in a veryearly stage. Kieffer said the plant wouldbe very important to small farmers. In a1999 survey, nearly 300 farmersexpressed interest in a processing plantand co-op that could help them marketbirds. The survey showed farmerswould produce 96,000 chickens, 4,500pheasants and 14,000 ducks.

NCBA to help ‘false’ co-ops becomereal

The National Cooperative BusinessAssociation (NCBA) has announced aninitiative to address the problem ofbusinesses presenting themselves ascooperatives when they are not cooper-atives. The problem, explained NCBA’sPaul Hazen, has become more preva-lent with the advent of e-business and

group purchasing. The businesses maybe trading on the good will that thepublic has for cooperative businesses ormay be ignorant of cooperative operat-ing principles. “Regardless of the rea-sons for these false claims, NCBA’s mis-sion is to support and protectcooperative enterprise,” he said.

The association will rely on mem-bers and other interested cooperatorsto keep it informed of potential prob-lem businesses. Indeed, the new initia-tive was prompted by a call to the asso-ciation about the status of a businesspromoting itself as a cooperative whenthat was not the case. NCBA’s responseto such cases is a two-stage program.When a questionable business is identi-fied, NCBA will contact the business todetermine whether it is operating as acooperative. If it is determined to be anon-cooperative, NCBA will first edu-cate the business about cooperativesand help it truly become a cooperative.

The initiative harkens back to thebeginnings of the association in 1916.At that time, James Peter Warbasse,association president, exposed a num-ber of stores calling themselves cooper-atives that were not democraticallycontrolled or run, but were insteadgenerating substantial profits for a fewpeople.

Tomato co-op files canner complaintThe California Tomato Growers

Association, a Stockton-based coopera-tive of canning-tomato growers, filedan unfair trade-practices complaintagainst Sun Garden-Gangi CanningCo. The Association claims that theRiverbank canner has cut out everyassociation grower and 100 percent oftheir tonnage from Sun Garden-Gan-gi’s contracted tonnage for the 2000crop year.

Facing lingering surpluses from lastyear’s bumper crop, Kevin Gangi saidthat a number of canners have cut backon contracts for the upcoming harvest.The Association, which gives growersmore clout than if they bargained indi-vidually, claims that Sun Garden-Gan-gi’s actions constitute a boycott, dis-crimination and a failure to bargain.California law requires that commodity

buyers bargain reasonably and seriouslywith grower cooperatives they recentlyhad done business with.

Tri Valley Growers sues OracleTri Valley Growers of California

announced a lawsuit against OracleCorp., alleging fraud, negligent mis-representation, malpractice and breachof contract because the Redwood City,Calif., software developer allegedlyfailed to fulfill its promise to modernizethe food co-op’s production and man-agement systems. TVG is asking formore than $20 million in damages. Thelawsuit follows Oracle’s alleged refusalto accept responsibility for a failed ven-ture into enterprise resource planning(ERP) software.

TVG retained Oracle in 1996 toinstall ERP software that wouldenable the co-op to integrate andcomputerize its operations – from rawproduct delivery to finished goodsdistribution. For TVG, this modern-ization of production and manage-ment meant computer systems at ninefactories employing more than 9,500workers, processing more than 1 mil-lion tons of fruit and vegetables annu-ally, and distributing and marketing15,000 Stock Keeping Units (skus), 24brands and thousands of private labelfood products domestically and inter-nationally.

According to TVG’s lawsuit, Ora-cle’s ERP solution never worked.Rather than correct the problem, admitfailure or provide the promised level ofsupport to make the system work, Ora-cle blamed TVG’s computers and itslack of technical expertise. The co-opreports it abandoned the investmentand retained another vendor. TVGfiled its lawsuit in California SuperiorCourt. Founded in 1932, TVGprocesses and markets nearly half of thecanned peaches, pears and apricots andclose to 10 percent of the canned toma-to products in the United States.

Co-ops buying into ‘green’ powerCalifornia co-ops are voting for the

environment with their electricity pur-chases. At least five co-ops haveswitched to a green electricity provider


for their stores. There is also an orga-nized effort underway to get all 60,000members of all the state’s food co-opsto purchase power from one of severalexisting green power providers.

“The co-op movement was born outof a frustration with the status quo wayof doing business,” said Steven Kelly,executive director of the RenewableEnergy Marketing Board. “It onlymakes sense for co-ops, which oftenoffer more environmentally consciousand superior products, to purchasetheir electricity from non-pollutingrenewable sources such as solar, windor geothermal steam power.”

Berkeley-based Missing Link, a work-er-owned bike co-op, is one of the mostrecent to switch to green power. Thestore went to GreenMountain.com’s 100percent renewable energy product,which helps support construction of anew solar photo-voltaic power plant inMendocino County and costs less thangeneric power.

Another Berkeley-based co-op,University Students’ CooperativeAssociation, switched to GreenMountain a year ago. The student

housing cooperative – the largest inNorth America – owns 20 properties,all of which are now powered bygreen electricity. Co-opportunityConsumers Co-op, Santa Monica,went with Commonwealth Energy,Tustin, Calif., providing power gener-ated from geo-thermal steam comingfrom Sonoma, Lake and Imperialcounties. Both Isle Vista Food Coop-erative, Santa Barbara, and People O.B. Organic Food Co-op, Ocean Beach,switched to GreenMountain.com’sWind For The Future. These co-opsare paying about a 10 percent premi-um to ensure that 25 percent of theirelectricity is generated at new windturbines installed in the San GorgonioPass, California’s wind farming site.

The three food co-ops that havealready switched are part of astatewide campaign organized by theTwin Pines Cooperative Foundationto get the 10 largest food co-op storesto purchase green power and theneducate members to also switch togreen power. The education campaignis funded by the California EnergyCommission.

Imperial Sugar offers plants to co-opImperial Sugar Co., the largest

U.S. marketer and processor ofrefined sugar, has offered to sell itsplants in Tracy and Woodland, Calif.,to the California Beet Growers Asso-ciation. Based in Sugar Land, Texas,Imperial Sugar markets its productsunder a variety of brands, includingSpreckels, Holly and Dixie Crystals.

“We discussed the possibility of agrower cooperative buying bothplants and the growers said theywould take the idea under considera-tion,” said Bill Schwer, Imperial’sexecutive vice president. “We talkedin general terms, not specifics, so thisis the start of our discussions. Weoffered to manage the plants and mar-ket the sugar and by-products.”

Imperial, which owns four Califor-nia plants, is the state’s only processor.Sugar beet profits have largely souredover the past decade, according toindustry data. The value of the coun-try’s sugar beet crop plummeted from$34 million in 1989 to less than $7million in 1998, the most recent fig-ures available. Harvested acreagedropped. Other factors such as theemergence of a soil-borne virus,drought and growing popularity ofsubstitutes for beet and cane sugar,also hammered yields and profits.Meanwhile, world expansion in plant-ed sugar beet acreage has produced arecord crop. And the possibility ofsignificantly higher imports of Mexi-can sugar into the U.S. market begin-ning Oct. 1 – enabled by the NorthAmerican Free Trade Agreement –may further push prices down. React-ing to the news, refined bulk-sugarprices fell recently to 15-year lows.

American Crystal considersforfeiture of sugar

American Crystal Sugar Co., Moore-head, Minn., may forfeit sugar to thegovernment for the first time in morethan 20 years because of poor prices. In amember letter, President James Horvathtold the 900 growers that it must consid-er the option. The USDA’s sugar pro-gram allows processors to put sugar upas collateral for nine-month loans. If

Glickman sets 2000 goals Calling 1999 “another extremely difficult year for America’s farm-

ers,” USDA Secretary Dan Glickman said President Clinton’s fiscal2001 budget includes new proposals to strengthen the farm safety netand to help farmers weather difficult times.

Glickman’s year 2000 priorities include: Supporting American farmers and ranchers: He will work with Con-

gress to improve the 1996 Farm Bill, providing a stronger and broadersafety net and enhanced conservation programs.

Helping farmers and rural America prosper: He will make signifi-cant additional investments in research and rural economic develop-ment, aggressively seek further opening of global markets, implementmandatory price reporting to help ensure fair competition for smallfarmers and ranchers, and propose a national organic standard.

Moving ahead together: Glickman pledged continued progress oncivil rights, ensuring that fairness and inclusion are part of everythingUSDA does.


prices remain under the loan rate,processors have the option of forfeitingthe sugar to the government instead ofrepaying the loan in cash.

Horvath blamed trade and domesticpolicies for pushing sugar prices totheir lowest levels in some 15 years.Among other factors, Horvath said, theUnited States is required to import1.25 million tons of sugar annually.Canadian imports of stuffed molasses –a mixture of sugar and molasses – havedisplaced at least 100,000 tons ofdomestic sugar, he claimed.

Mark Weber, executive director of theRed River Valley Sugarbeet GrowersAssociation in Fargo, said forfeiting sugaralso could give the industry a black eye.The federal sugar program was designedto operate at no cost to the government.

“When we won the farm program onsugar, we only won by nine votes in theHouse,” Weber said. “We’re going tohave to build a program that’s economi-cally responsible, politically feasible andprovides a safety net for growers withinthe budget constraints of Congress.”

Growmark adds facilitiesGrowmark Inc. added 16 retail and

eight wholesale Illinois agrichemicalfacilities to its existing member companynetwork of fertilizer and agrichemicalplants by purchasing Agro Distribution

LLC in Illinois. Bloomington- basedGrowmark bought the facilities for anundisclosed price from Minnesota-basedfarm cooperative Cenex-Land O’ LakesAgronomy Co., which bought the for-mer Terra Industries facilities last June.

“This purchase will complement theexcellent distribution system our membercooperatives currently have,” said Grow-mark CEO Bill Davisson. “Ultimately,adding these facilities into the Growmarksystem will mean better service to ourfarmer-owners, which is our top priority.This is a valuable opportunity to expandour ability to meet and exceed farmers’needs in an efficient manner.”

New Nebraska pork co-op plannedStan Rosendahl, Creston, Neb.,

immediate past president of theNebraska Pork Producers, announcedduring the 27th annual Pork Expo atPlatte County Agricultural Park that anew pork co-op is being planned. He ischairman of the steering committeedeveloping Family Quality Pork Pro-ducers. Meetings are expected thisspring to gauge interest and providefurther details, including selection of aproject site. The plan tentatively callsfor producers to buy shares in the co-op. The co-op will not own livestockand all profits will go directly to pro-ducers. Consumers have started to ask

for specific types and qualities of prod-uct and the co-op will try to market tothose demands, Rosendahl said.

“The goal is to be further into thepork chain, closer to the consumer,”Rosendahl said.

New pork co-op could hike profitsJack Rundquist, a Butler County, Ill.,

pork producer, has been elected chair-man of Pork America, a closed coopera-tive marketing association which plans tocoordinate pork production, processing,distribution and marketing for members.With no funds to work with, revenueinitially must come from Pork Americamemberships. Until April 15, producerswho joined the co-op paid $500 for every5,000 hogs they plan to market. Produc-ers who market fewer than 5,000 hogscould combine forces with nearby pro-ducers to meet the commitment,Rundquist said. Producers who join haveboth the right and obligation to deliverhogs.

Rundquist and seven other boardmembers from six states have a target of2,000 memberships, after which they willlook for marketing opportunities. “Wemay be able to cooperate with an existingprocessor,” said Rundquist, citing a suc-cessful effort by beef producers to buyslaughter space with Farmland Industriesto market a special brand of beef.

DFA Cow gets rave reviewsHundreds of cows recently promenaded through the streets of downtown

Chicago. No, it wasn’t the return of the stockyards. The bovine beauties were

life-sized fiberglass cows transformed by Chicago artists into enchanting

works of art. Chicago’s “Cows on Parade” were on display along Michigan

Avenue, in the Loop and River North, near museums, in Grant Park and on the

Moo-seum campus. Dairy Farmers of America’s “Uncle Sam Cow” was the

favorite of Chicago officials and tourists alike. For a statue, this cow really got

around. She was featured on a postcard the nation’s largest dairy cooperative

sent to members of Congress in Washington, D.C.

Photo courtesy Dairy Farmers of America.


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