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USDA / Rural Development January/February 1999

6565yearsyears

Special Issue Celebrating Sixty-Five Yearsof CooperativeProgress

Special Issue Celebrating Sixty-Five Yearsof CooperativeProgress

Rural

ii November/December 1998 / Rural Cooperatives

65 years

We begin the year marking the end of the

millennium with this special issue of “Rural

Cooperatives” looking back over the past 65

years of cooperative progress as reported on

the pages of USDA’s cooperative magazine,

begun in April 1934. Article excerpts have

been culled from the nearly seven decades of

the magazine’s existence to capture mile-

stone events and developments in the

nation’s cooperative movement.

Naturally, since our timespan covers

most of the 20th century, space permits the

inclusion of only a representative sample of

cooperative news and events as reported in

the magazine. Nevertheless, the highlights

provide a fascinating chronicle of cooperative

progress over 65 years. Our thanks to

Patrick Duffey, Pete Manzelli and Daniel

Campbell of the Rural Development Office of

Communications for producing this issue.

Reading the news briefs on the following

pages gives a sense of history in the develop-

ment of agriculture and the evolution of

cooperatives as a vibrant sector of the farm

economy. It will also demonstrate the role of

USDA in assisting the development of

farmer-owned businesses, the various types

of business activity they have engaged in

and — in some cases — when these activi-

ties were eclipsed by changing technology

and times. Statistical articles throughout

this period document the growth in number

of cooperatives, then a gradual reduction in

numbers as changing transportation modes

and size of farms enlarged service areas that

led to the trend toward consolidations that

continues to this day. Volume of business

transacted has continued to increase, as

have market shares.

USDA’s work with cooperatives predated

the creation of the magazine, dating back to

the early 1900s. A number of reports about

cooperatives were issued by USDA following

passage of the Cooperative Marketing Act of

1926 — which formally created a multi-mis-

sion cooperative services unit within USDA.

The cooperative unit was part of the Farm

Credit Administration (FCA) from 1933-53.

The Cooperative Research and Service Divi-

sion of FCA tracked the emergence and per-

formance of the cooperative farm credit

system along with the marketing, farm sup-

ply and farm service sectors of the coopera-

tive movement.

Following separation from FCA in 1953,

the Farmer Cooperative Service was estab-

lished as an independent USDA agency and

primarily focused on marketing, farm supply

and related service cooperatives. The maga-

zine continued as “News for Farmer Cooper-

atives,” published by the new agency. The

Rural Electric Administration concentrated

on electric and telephone cooperatives, and

FCA — now separated from USDA —

focused its energies on farm credit banks

and the banks for cooperatives.

Of particular interest in the recap is the

emerging use of petroleum and commercial

fertilizer as the horse and buggy days were

replaced by farm automation. Marketing

cooperatives similarly changed dramatically

in scope of business and service territory.

Development of brands for foods processed

by cooperatives took on a regional and often

national identity. More products were

exported abroad.

The different roles performed by coopera-

tives during World War II provides insight

into how co-ops were called upon to meet

defense needs in weapons manufacturing as

well as materials used in fighting the war.

Our retrospective captures the emphasis

USDA placed on the development of coopera-

tives in such areas as irrigation, insurance,

poultry marketing, frozen food lockers,

handcrafts and transportation.

Certain areas of emphasis are consistent-

ly found throughout the seven decades

chronicled. These recurring themes include:

the importance of cooperative education in

spreading knowledge of cooperative princi-

ples and practices; the importance of mem-

bers making a commitment through member

agreements and equity investments to

finance cooperatives; cooperative combina-

tions through mergers or consolidations; and

coordination through federations, marketing

agencies-in-common and joint cooperative

ventures.

The emergence of new technical services

provided by local and regional cooperatives

and, beginning in the 1970s, creation of

value-added/new-generation cooperatives in

both farm production and marketing are also

documented. Similarly, the tremendous wave

of consolidation and mergers among local

and regional farm supply, marketing and

credit cooperatives can be observed.

Each reader will draw different lessons

from this chronology of the role cooperatives

have played in service to agriculture. Over-

all, this chronology provides an overwhelm-

ing sense of the growing presence and

importance of cooperative self-help activity

— despite a number of setbacks — as coop-

eratives have steadily increased their share

of farm marketing and farm supply purchas-

es and farm services.

What does the future hold? Cooperatives

will certainly continue to restructure to meet

the needs of a changing farm constituency.

Cooperatives will continue to fulfill their role

as a primary means for farm entrepreneurs

to maintain market access and services as

we enter the new millennium.

We hope this look back at the past 65

years will provide insight that helps all coop-

eratives continue to progress during the next

65 years and beyond. No matter what tech-

nological, economic and social changes lie

ahead of us, the advantages of rural people

working together to direct and control their

own fate will never diminish.

Magazine Time Capsules Reveal Progress of Co-op Movement

Randall E. Torgerson

Deputy AdministratorRBS Cooperative Services

ii November/December 1998 / Rural Cooperatives

2 Magazine Overview

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

4 The 1930s

Cooperatives help farmers survive the Great Depression and position

themselves for new marketing opportunities

10 The 1940s

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

post-war era

18 The 1950s

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

expand

26 The 1960s

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

36 The 1970s

Co-ops embrace new technologies and structures to maintain

owner control

46 The 1980s

Mergers, consolidations change look of U.S. cooperatives

54 The 1990s

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

Rural Cooperatives (1088-8845) is publishedbimonthly by Rural Business–Cooperative Service, U.S.Department of Agriculture, Washington, DC. The Secretaryof Agriculture has determined that publication of this peri-odical is necessary in the transaction of public businessrequired by law of the Department. Periodicals postage paidat Washington, DC. Copies may be obtained from theSuperintendent of Documents, Government Printing Office,Washington, DC, 20402, at $3.00 domestic, $3.75 foreign;or by annual subscription at $11.00 domestic, $13.75foreign. Postmaster: send address change to: Rural Cooper-atives, USDA/RBS, Stop 3255, Wash., DC 20250-3255.

Mention in Rural Cooperatives of company and brandnames does not signify endorsement over other companies'products and services.

Unless otherwise stated, contents of this publication are notcopyrighted and may be reprinted freely. For noncopyrightedarticles, mention of source will be appreciated but is notrequired.

The United States Department of Agriculture (USDA) pro-hibits discrimination in all its programs and activities on thebasis of race, color, national origin, gender, religion, age,disability, political beliefs, sexual orientation, and marital orfamily status. (Not all prohibited bases apply to all pro-grams). Persons with disabilities who require alternativemeans for communication of program information (braille,large print, 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, Whitten Building, 14thand Independence Avenue, SW, Washington, D.C. 20250-9410, or call (202) 720-5964 (voice or TDD). USDA is anequal opportunity provider and employer.

Dan Glickman, Secretary of Agriculture

Jill Long Thompson, Under Secretary, Rural Development

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

Randall Torgerson, Deputy Administrator, RBS Cooperative Services

Patrick Duffy, Editor

Dan Campbell, Executive Editor

George Avalos & Pete Manzelli, Design

Have a cooperative-related question? Call: 202/ 720-6483 FAX: 202/ 720-4641, Information Director

This publication was printed with vegetable oil-based ink.

Rural

JANUARY/FEBRUARY 1999 • VOLUME 66 NUMBER 1

United States Department of Agriculture

2 January/February 1999 / Rural Cooperatives Introduction

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

By Patrick Duffey, Communications Specialist,USDA Rural Development

Editor’s Note: Duffey was editor of“Farmer Cooperatives” magazine from1981 until 1992, when he switched to edit-ing USDA’s special cooperative reports.The winner of the Klinefelter Award — theindustry’s highest honor for cooperativecommunicators — he returned to the edi-tor’s chair to produce this special issue ofthe magazine.

The spring of 1999 marks the 65thanniversary of USDA’s journal for coop-eratives. The monthly “News for FarmerCooperatives,” the forerunner of today’sbimonthly “Rural Cooperatives” maga-zine, was first published by the coopera-

tive research and service division of theFarm Credit Administration, then anagency of the U.S. Department of Agri-culture. The nation and its agriculturalsector were emerging from the GreatDepression when USDA introduced thismagazine to help spread knowledge aboutfarmer-owned cooperatives and what wasrequired to make a success of them.

It appeared quietly, with little fanfarein April 1934. Although initially limitedin circulation, word of its existence spreadand demand for copies grew. The originalissues were just 12 typewritten pages.

Like any publication with an extend-ed life, the content, style and even thename of the magazine evolved over theyears to suit the conditions of its day. InDecember 1953, FCA separated fromUSDA and became an independent regu-latory and farm credit system promotionagency. USDA’s Farmer Cooperative Ser-vice was formed at the same time, andassumed responsibility for the magazine,the name of which was shortened to “Farmer Cooperatives.”

In its 65-year span, the publication hashad 10 editors. The third one, the late W.Gifford (“Giff”) Hoag, later went on tobecome executive assistant to E.A.Jaenke, then governor of the FCA. In abook he wrote about FCA/FCS, Hoag, whoserved the agency for 41 years, recalled,“It’s amazing that the one-year-old FCAcould find time to launch a new educa-tional publication. It was trying to helpthe Federal Land Banks (FLBs) handlethousands of loan applications. The bankshad closed $27 million in loans in one daythat year, more than the entire year 1932.FCA was launching 600 local ProductionCredit Associations (PCAs) and the 13Banks for Cooperatives. Usually, in timesof stress in cooperatives, educational andinformational programs are the first tofeel the pinch.”

Hoag continued, “A year later, Presi-dent Franklin Roosevelt closed all com-mercial banks. The bank holiday lasted

Intro

Gene Ingalsbe, the fifth editor, brought modernjournalism practices to the magazine.

Upon his retirement as governor of the Farm Credit Administration, E.A. Jaenke, left, is congratulated by “Giff”Hoag, his executive assistant and long-time editor of this journal.

Introduction Rural Cooperatives / January/February 1999 3

several days. In succeeding months, thepresident asked any farm family whosefarm was being foreclosed to wire him.Wires and letters inundated the FCA andthe Federal Land Banks.” The ensuingflood of communications from farmerstook a three-shift stenographers’ pool tohandle, he said. “Creditors were beingasked to delay foreclosures until the FLBscould try to refinance (loans). FCA recruit-ed hundreds of people and expanded itsappraisal staff from 200 to more than5,000 in less than a year.”

Many cooperatives failed and count-less others were struggling financially.“The Banks for Cooperatives were beingstaffed to meet the challenge,” Hoag said.The organization of PCAs across the coun-try had been completed, thus giving farm-ers access to operating money for the year.

Hoag joined discussions with Cooper-ative Commissioner Frank Peck andInformation and Extension Director EdReid when they agreed to develop amonthly publication as an important partin communicating with farm supply andmarketing cooperatives. At first, therewere no photos in the magazine, althoughan occasional graph was used to illustrateresearch. Within two years, “News forFarmer Cooperatives” was being printedin a slick magazine format, began usingblack-and-white photographs and oftenran more than 20 pages per issue.

During the editorship of the late Ms.Beryle Stanton, who worked with bothVal Sherman and Hoag in FCA duringWorld War II, more visuals, including car-toons, came into use to illustrate ideas.She encouraged many people from thecooperative community to write articlesfor her. From the beginning, articles werepublished about the agency’s usefulresearch projects, “but (we) avoided mak-ing the magazine only a house organ,”Hoag said. The magazine became aninstrument for promoting practices thatimproved cooperative operations.

Ms. Stanton had the longest tenure of

any of the editors — 21 years, from 1950to 1971— and had worked on it withHoag in FCA six years before that. In1964, she began carrying the banner forthe first national observance of “Octoberis Cooperative Month. ‘ She saw the swiftchanges cooperatives had to make “asthey faced hot and cold wars in the mid-century era, struggled to survive post-wardepressions, grew through relative pros-perity, geared up for swiftly emerging newtechnologies and management practices,and adapted to the fast changing andmodernized agriculture.”

People working with cooperatives alsochanged during this time. At first, coop-erative directors were typically smallfarm operators with a limited education.By the late 1960s, many, if not most, co-opdirectors were well educated and man-aged large farm operations, which gavethem an expanded perspective in makingdecisions on cooperative boards.

“Cooperative employees also adaptedto new agricultural and industrialdemands. Women, young farm couples,and youth emerged as stronger voices andmore interested participants in coopera-tives.” Stanton felt cooperative people

were “a different breed, more giving, andmore sophisticated than they used to be,but they still have that same spirit.”

In a final magazine article beforeFCA’s exit from the USDA in December1953, FCS Governor C. R. Arnold said themagazine “is an effective means of helpingto coordinate the work of all cooperativesin the country — credit as well as pur-chasing, marketing and service organi-zations. Farmer cooperatives throughoutthe country profit from its publishedresults on current research related tofarmer cooperatives, information basedon experience of all kinds of farmer coop-eratives, and general educational mater-ial on basic cooperative principles andproblems.”

Gene Ingalsbe was the fifth editor and,like his successors, he came from a news-paper background and later worked ascommunication specialist for major coop-eratives. He spent eight years as manag-ing editor of “Farmland News” for Farm-land Industries Inc., and two yearsediting an agricultural trade magazinebefore joining USDA. For a time, he wasboth magazine editor and director of infor-mation. He bridged the gap between the

USDA magazine editor Beryle Stanton was credited for carrying the banner for the first National CooperativeMonth observance.

5A-FPO6A-FPO

4 January/February 1999 / Rural Cooperatives

early years of the Farmer CooperativeService and later Agricultural Coopera-tive Service. He brought modern journal-ism practices and a professional touch tothe magazine.

Patrick Duffey edited the magazinefrom 1981 to 1993 after spending an ear-lier 12 years as publicity director andmagazine editor with GROWMARK, Inc.,at Bloomington, Ill. Near the end of histenure, the magazine made the leap to

four-color reproduction. His successor,Dan Campbell, came to USDA after work-ing for newspapers and as an editor withthe Blue Diamond Growers almond coop-erative in California. He continued toemphasisze quality photography and in-depth feature articles. About this time thename of the magazine was changed to“Rural Cooperatives” to reflect the inclu-sion of articles dealing with all types ofrural cooperatives, although the empahsis

has remained on agricultural co-ops.Campbell was later named deputy direc-tor of public affairs for USDA’s RuralDevelopment mission area.

While editors have come and gone andthe look and content of the magazine con-tinues to evolve, the magazine’s goalremains much the same as when found-ed: to promote the use of cooperatives byrural Americans as an effective way toimprove their quality of life. ■

April Tyler instructs students in a one-room schoolhouse on Smith Island, Md., where a crab meat-packaging co-op was formed by local women. Theschool has since closed, but the co-op continues tothrive. Background image: a notice calls members tothe next meeting of the Smith Island Crab Meat Co-op. USDA Photos by Bob Nichols

Rural Cooperatives / January/February 1999 5

Cooperative Purchasing Comes of AgeCensus figures and other data reveal thatcooperative farm supply purchasing hasskyrocketed from $75.9 million in 1924 toan estimated $250 million in 1934.Dr.Joseph Knapp, principal agriculturaleconomist in the Farm Credit Adminis-tration, says the most striking develop-ment has been the spread of purchasingto almost all parts of the United States.“Cooperative purchasing of farm suppliesis now an important farm activity in asmany as 8,000 communities,” says Knapp.The door was opened for rapid expansionof cooperative business activity by theCooperative Marketing Act of 1926. It wasopened still wider by the Farm CreditActs of 1933 and 1935. This legislation“recognized the increasing importance ofcooperative purchasing by providing equalfinancial services to farmers’ marketing,purchasing and service associations.”

Knapp also notes that there has been

rapid growth in large-scale purchasingcooperatives. In 1925, for instance, farm-ers purchased $6 million in supplies fromEastern States Farmers’ Exchange in NewYork. The amount increased to $14 mil-lion a decade later. Likewise, farm supplypurchases increased from $6.6 million to$25 million for Grange League Federationin new York. Illinois Farm Supply Co.,which didn’t even exist in 1926, did $10million in farm supply sales in 1935. Oth-er new farm supply co-ops developed dur-ing the previous 10 years include: Mid-land Cooperative Wholesale in Minnesota,Farmers’ Union Central Exchange, Min-nesota; Cotton Producers Association,Georgia; North Carolina Farmers Coop-erative Exchange; Consumers Coopera-tive Association, Kansas; and NationalCooperatives Inc., an Ohio-based interre-gional cooperative serving 25 regional co-ops. Land O’Lakes Creameries, Minneso-ta, also emerged during this time as asignificant regional dairy marketer.

The increasing use of motor-drivenequipment by farmers gave rise to petro-leum cooperatives starting in 1921. Theirgrowth has been particularly dramatic inthe Midwest, fueled by the extensive useof tractors, trucks and other motorizedimplements. By 1935, about 2,000 asso-ciations supplied petroleum products val-ued at $40 million. This period alsomarked the development of regional orstatewide wholesale federations of localfuel cooperatives.

Large petroleum associations areblending their own brands of oil in coop-eratively owned plants. Standardized sys-tems of local distribution have been devel-oped by large-scale centralizedcooperatives such as Southern StatesCooperative in Virginia. Cooperative man-ufacturing of supplies — feed, fertilizer,insecticides, package materials, and paint— has also gained prominence. The StateFarm Bureau cooperatives in Illinois, Indi-ana, Michigan and Ohio share in the prof-its of a company manufacturing fertilizerfor them. West Coast marketing coopera-tives are often using subsidiary compa-nies or departments to purchase supplies.

Farmers, Co-ops Rebuild After DepressionW.I. Myers, governor of the Farm CreditAdministration, is encouraging farmers— whose economic condition hasimproved in the past two years — to turntheir attention to strengthening theircooperative organizations. This is vital,he says, because marketing farm com-modities and purchasing “are as much apart of farming as producing crops andlivestock products. In case of weaklyfinanced cooperatives, a plan should beestablished which will gradually build onmembers’ contribution to the co-op, thusincreasing the net worth that is essentialfor the continued success of the coopera-tive and its members.

“We want to build cooperatives that

Unloading 1,500 bushels of wheat from a box car only took five to seven minutes and the service of two menat a major co-op terminal in the early 1930s, thanks to up-to-date unloading equipment.

Cooperatves Help Farmers Survive the Great Depression, Position Themselves forNew Marketing Opportunties

1930s

6 January/February 1999 / Rural Cooperatives The 1930s

The 1930s Rural Cooperatives / January/February 1999 7

belong to members and construct cooper-atives on a financial basis that gives a con-tinually increasing proportion of member-ownership,” Myers says. The only way tobuild up net worth, he notes, is throughmember contributions or earnings. “Manymembers of cooperative have debts andthey have to be financed.”

Cooperatives would be better off, Myerssays, if members turn to Federal LandBanks for mortgage credit and ProductionCredit Association for production credit.

“With several hundred thousand farm-ers keeping their hands on the control ofthe farm credit system, there will be a fargreater degree of success for cooperativecredit and a far greater degree of serviceto farmer-borrowers throughout the coun-try than at any time in the past.

“Farm land associations best withstoodthe Depression and operated at a lowercost basis in districts that had been devel-oped into strong cooperative organizationsand were used to not only making loans,but to service and collect loans.”

FCA Introduces Co-op Statistical ReportA supplemental statistical overview ofagricultural cooperatives — started by R.H. Ellsworth, agricultural economist withthe Farm Credit Administration — madeits first appearance in 1935. This reportset the pattern for future annual reportson the state of the nation’s farmer coop-eratives for the rest of the century. Thenumber of active associations at the closeof 1935-36 was 10,500, with 69 percent ofthem located in the 12 north-centralstates and 8 percent operating in west-ern states. Minnesota lead the nationwith 1,401 associations, followed by Wis-consin with 1,086, and Iowa with 954.About 69 percent of the estimated mem-bership of 3.66 million participated inmarketing cooperatives and the balancein farm supply co-ops. Total business vol-ume of the associations topped $1.8 bil-

lion, 86 percent of it conducted by mar-keting cooperatives. The top business vol-ume states were California, Illinois, Min-nesota and Iowa.

Retains Build Cooperative Business“Most cooperative failures result from alack of a thorough understanding that acooperative marketing organization is abusiness institution and should be regard-ed as such,” says Cooperative Bank Com-missioner S.D. Sanders. “Many associa-tions have gone under because memberswere demanding too much cash — cashthat management needed to market theirproducts. Members have deserted [theirco-op] to get better prices outside,” he says.

As a solution, Sanders recommendsthe board and management use retainsor stock ownership in the cooperative tostress to members the stake they have intheir business association. “Let the mem-bers know how much is being taken off[prices] and give them a stock certificateto show their ownership in the associa-tion. In time, they will see that it is a sav-ings account for members and they willtake a greater interest in the cooperative.”

Stressing that farmers are moredependent than many think, Sanderssays, “They can produce until they areblue in the face, but until they bring someof the pluses (from marketing) to theirside of the ledger, they will not get aslarge a part of the consumer’s dollar as ispossible from their crops.”

Some cooperatives operating with nei-

ther advance member capital nor retainsfrom the businesses, Sanders says, wereforced to forego profits during the Depres-sion. These co-ops even endangered theircapital structure to hold a sufficient vol-ume of business to warrant continuedoperation. Contrasting with these busi-nesses were associations that built up suf-ficient reserves through regular retainsand annually retired the oldest stock bythe new investments generated throughmember retains. This type of cooperative,with annual distributions, helped under-write the financial success of memberfarms, Sanders says.

Illinois Farm Supply System Reports Rapid GrowthMore than $10 million in farm supplieswere sold in 1935 by 60 locally owned ser-vice companies associated with IllinoisFarm Supply Company, up by about 25percent from 1934. The bulk of the saleswere petroleum products, which generat-ed $1.4 million for Illinois from gasolineand sales taxes.

About 68-million gallons of petroleumproducts — including gasoline, kerosene,distillate, lubricating oil and grease —were sold by member co-ops in 1935.Sales of soyoil paint jumped 65 percent,to 175,000 gallons. Farmers’ investmentin the 60 companies reached $981,595.They had a combined accumulated sur-plus of almost $1.2 million for use asworking capital.

Nearly half of the companies operatedservice stations for petroleum products.Three-fourths of the business in 1934 waswith 80 percent of the members. Eachcompany set aside part of its earnings forworking capital purposes. Cash dividendsto members totaled $805,000.

Co-op Activity Surges in TexasTexas cooperative activity was on theupswing in 1935, reports the Houston

This cartoon took a light-hearted look at the difficultysome co-ops have getting enough board members toattend meetings to constitute a quorum. The bestway to avoid this situation: keep meetingseducational and encourage director input.



Bank for Cooperatives. Cotton farmersled the way by organizing new coopera-tive cotton gins. Bank President SterlingEvans says the move toward cooperationwas so strong that 75 new co-ops wereformed in 1934-35 despite earlier cottoncrop failures. The crop rebounded in 1935.The state’s 150 cooperatives have a totalmembership of nearly 30,000 members.

Walnut Growers Market 50 Million PoundsCalifornia’s Walnut Growers Associationmarkets 50 million pounds of walnuts val-ued at $8 million for it 39 member asso-ciations. This accounts for about 87 per-cent of the state’s total walnut crop.

Shelled walnuts are being sold on theexport market while unshelled nuts areprimarily sold for domestic consumption.Most of the business is being transactedby mail and wire. Sales were made directto wholesale grocers, chain stores and thewholesale produce trade through a groupof 128 food brokers. Most of these brokershave been with the association since itsformation. While trade outlets had beenwell established in Canada, new ones werebeing developed for northern Europe.

National Markets Developing for Wool AssociationsOf the 13 major state or regional fleece-woolassociations — including five formed in 1938— all (with the exception of one based inOhio) belong to the National Wool Market-ing Corporation, headquartered in Boston.The bulk of fleece wool is processed within a400-mile radius of Boston. The association isowned and controlled by the local wool coop-erative associations. All of these co-ops areproviding financing, marketing and educa-tional services to members.

The average flock in the East and Mid-west is currently about 50 head. Associa-tions handling one- to two-million poundsof wool are grading in car-lot quantities,as preferred by manufacturers. Most asso-ciations are offering tours to growers, ledby county agents and extension workers,to better acquaint them with how theirwool is graded and handled.

Local marketing pools are proving to beadvantageous to farmers and stockmenwith small herds who operate near irriga-tion projects in southern Idaho. Most ofthe growth has occurred since 1930.Changes in agricultural production meth-ods in the past decade caused by lowprices, reduced yields and unsatisfactorymarket outlets for cash crops have led toincreased livestock feeding and production.

Loans to Water Mutuals GrowServing the credit needs of Californiafarmers’ water mutual companies is fastbecoming an important part of businessfor the Berkeley Bank for Cooperatives.The bank’s first such loan in 1935 wassoon followed by 10 others, totaling $1.2million. The figure was expected to reach$3 million by year’s end after some com-panies reorganized as cooperatives.

Co-op Financing ClimbsCooperative institutions loaned farmers$119 million during the first half of 1936,

A mother taking part in the cooperative teaches herchildren about its importance in the family's financialand social future. This, in turn, helps them becomebetter future citizens.

Walnuts are sorted at the California Walnut Growers Association, which marketed 50 million pounds of walnuts for its 39 member associations in the mid-1930s. That was equal to about 87 percent ofCalifornia’s tonnage.


or more than a third of the $343 millionloaned by the Farm Credit Administra-tion. The 550 associations had a 21-per-cent increase in business compared with1935. This was the third consecutiveincrease in spring crop and livestockfinancing since the organizations formedin 1933-34.

Trucking Livestock on the RiseDrive-in business is speeding ahead forthe Central Cooperative Association live-stock sales agency in South St. Paul,Minn. Increased truck transportationresulted in drive-in business jumpingfrom 17 percent of total business in 1929to 59 percent in 1935. Given the growthin livestock trucking, local shipping asso-ciations which rely on railroads arealmost extinct. In 1935, 83 percent of thelivestock receipts from Minnesota andWisconsin arrived at St. Paul by truck.

About 60 percent of the 200 livestockassociations shipping to Equity Coopera-tive Livestock Sales Association at Mil-waukee, Wis., are moving their livestockby truck, causing the gradual disappear-ance of shipping associations. Twentyyears earlier, nearly all livestock destinedfor Milwaukee was moved by rail.

Developing Tomorrow’s Cooperators“Get them involved in the movementfinancially,” is Oklahoma banker M.H.Howard’s suggestion for involving youthin cooperatives. Howard, who managesFarmers National Bank in Enid, Okl.,says “If people can’t be interested in a pro-ject in which they have money invested,then they can’t be interested at all.”Howard says there is too much preachingat young people “instead of giving thema chance to participate actively in the pro-gram on a par with the grownups.”

Howard suggests wheat producers givetheir children an allotment of acres fromwhich the crop would be marketed

through a cooperative elevator in whichtheir parents own stock. The elevatorswould sell a share to these youngsters.One or two of these youths in every com-munity would be named directors at largeon the board.

“There is no more sobering and wit-sharpening experience...than to matchminds with thinking men on the board.”And dads bringing their children to theannual meeting would get and keep theminterested, he said.

Co-ops Need Emergency ReservesEven though patronage refunds helpbuild volume and hold member interest,“You can’t build successful cooperativesby appealing to producers with anunsound, inadvisable business action,”cautions S.D. Sanders, cooperative bankcommissioner. “Failure to build up suffi-cient surplus and reserve is one of the fre-quent causes of financial stress amongcooperatives.” The reserve must be largeenough to enable the cooperative to meetunforeseen circumstances.

“Every association is subject to emer-gencies when some reserve cash is badlyneeded to tide the organization over a dif-ficult period.” Despite pressure on man-agement and directors to disburse sur-plus funds, in order to survive, anassociation’s financial structure must beplaced on a sound basis. Members andmanagement must understand the finan-cial needs of the association, he says.

Co-op Livestock Marketing Gains in WestCooperative livestock marketing is gain-ing a foothold in the western states thatproduce a large surplus of cattle andsheep. Leading the way is the FarmersUnion Livestock Co. in Denver. Coopera-tive development has been slower in the“range states” of the West than in theMidwest or East, but the trend began to

increase in the West after 1930.By 1936, 10 large livestock associations

were operating nationally. Between 1931and 1935, the volume they handled morethan doubled, to 2.2 million head. Thesecooperatives have reduced profitsskimmed off by speculators and reducedunnecessary handling costs in movingfeeder cattle and lambs direct from rangeto feedlots.

Fruit, Vegetable Co-ops GainingSales, excluding supplies, for 1,063 fruitand vegetable marketing associationsserving 166,000 growers reached nearly$200 million during the 1935-36 season.About 83 percent of that amount was han-dled by fruit cooperatives. Among themajor problems they face are: private fruitmarketing businesses are gaining controlof crop share offering production loans togrowers; greater use of trucks to transportcrops is making it more difficult to gaugethe quantity of a commodity moving tomarket; some truckers are also becomingitinerant salesmen; concentration of bar-gaining power by chain stores is present-ing a challenge and opportunity best metby concentrated selling.

FCX Formed in North CarolinaFarmers Cooperative Exchange (FCX),formed in 1934 as North Carolina’sstatewide marketing and farm supplycooperative, now has three separately

This cartoon illustrated a 1939 magazine article aboutthe increasing interest of women in the business sideof farming and in attending the annual meetings.


incorporated departments: FCX Seed Ser-vice, FCX Fruit and Vegetable Service,and FCX Poultry Service. Each has to beself supporting. The 13-member FC boardrepresents growers, state agriculturalinstitutions and the State Grange andFarm Bureau.

Producers Mutual Exchange, an ear-lier attempt to federate about 75 localmutual exchanges, failed for lack of cap-ital and trained management and mergedwith FCX. Those exchanges and FCXbranches serving 22 of the state’s 100counties continued operations. In anagreement with Virginia’s SouthernStates Cooperative (SSC), which had beenoperating in part of North Carolina, FCXwill handle the marketing program andprovide wholesale and retail farm sup-plies. SSC provides manufactured goods,such as fertilizer, feed, and seed. ThreeSSC directors also serve on the FCXboard. Directors have agreed to pay halfof the annual savings in stock and therest in cash.

Cottonseed Co-ops Open in Cotton BeltThe five cooperative cottonseed oil millsoperating in the Cotton Belt crushed

about 100,000 tons of seed in 1937, doubletheir 1936 crush. Plains Cooperative OilMill in Lubbock, Texas, and Delta Prod-ucts Co. in Wilson, Ark., have just begunoperating. Assets of all these cooperativestotal nearly $1 million.

Most of these co-ops incorporatedunder their state’s laws. Members andnon-members are treated alike in theannual distribution of savings. Nearly allthe voting stock is held by members.Stock dividends are limited to 8 percent.Member equity in the five mills is almost$700,000, or almost three-fourths of thetotal investment. The cooperatives servenearly 2,000 members.

First Co-op Refinery Opens in KansasThe first cooperative-owned oil refineryopened in 1939 at Phillipsburg, Kan., byNational Cooperative Refinery Associa-tion, a subsidiary of Consumers Cooper-ative Association (CCA), based in KansasCity. A 70-mile pipeline connects the refin-ery with oil fields. The $700,000 plantuses 3,000 barrels of crude oil per day, orthe daily equivalent of 11 railroad-carloads of refined fuels.

The refinery supplies 40 percent of the

refined fuel needs of 440 local cooperativemembers of CCA located in nine states.In 1938, the locals marketed more than6,000 carloads of gasoline, kerosene, trac-tor fuel and distillate. And during a 1939membership drive, CCA added 69 morelocal cooperatives with 2,498 members.

‘Coffee’s On Us,’ Co-op Tells PatronsThere is no shortage of good will towardpatrons of Farmers Cooperative Companyat Oneida, Ill. For the donut dunkers,Manager Leo Windish had the answer: freecoffee at a local restaurant. Oneida’s pop-ulation — primarily people of Scandina-vian descent — enjoy their coffee, he says.

Windish says it was the best promotionthe cooperative ever had. He feels littlethings that humanize the cooperative arejust as important as following sound busi-ness practices, such as posting livestockreceipts and prices at the office — eventhough the cooperative handles no livestock.A dozen phone calls still come in everymorning about the postings. Periodically,patrons receive a small token gift from thecooperative, such as a key ring or pencil.

How To Appraise Your Co-opWhether sizing up a dairy cow, farm trac-tor or automobile, the principles forappraising are similar to those needed toappraise your cooperative. These nine fac-tors were suggested by J.E.Wells, Jr.,

These illustrations promoted an easy way to pay off a farm mortgage by using 4 percent Federal Land Bankloans, repayable in small regular installments suited to the individual farmer's income. Producers wereencouraged to plan ahead on what crops or livestock to sell to meet payments, to set up an interest-payingreserve to protect them from the drought or insects, and to get out of debt sooner by paying more on themortgage than required in good years.


deputy cooperative bank commissioner ofthe Farm Credit Association: Is there aneconomic need for the co-op?; Is the man-agement good?; Are the association’smembership relations satisfactory?; Arethe operating policies strong?; Are thedirectors qualified for their jobs?; Is theassociation’s financial condition satisfac-tory?; Do past history and present condi-tions point toward successful future oper-ations?; Is the business volumesatisfactory?; Can the cooperative meetor overcome competition?

Michigan Builds Local Co-opsSince 1931, the number of member asso-ciations in Michigan has multiplied ten-fold. By 1938, about 40,000 Michiganfarmers were using the services of 139local cooperatives affiliated with Michi-gan Farm Bureau Services, the statewholesale farm supply cooperative andits 10 branch retail farm supply stores.Sales for fiscal 1938 reached $2.8 million,plus $800,000 from the retail stores.

Among the members and branches arefarm supply associations, cooperative ele-vators, and cooperative oil associations.The locals mix much of the feed they sellfrom ingredients obtained for state asso-ciations which purchase supplies from twointerregional cooperatives: United Coop-eratives and National Cooperatives.

Challenge’s Silver Fleet Serves L.A. Dairy MarketCalifornia’s Challenge Cream and ButterAssociation was formed in 1910 in LosAngeles by a small group of dairymenrenting a basement storeroom. They puta horse-drawn delivery vehicle on thestreets as a “challenge” to butter mar-keting interests. Today, in 1939, it oper-ates a “silver fleet” of 225 streamlinedtrucks working out of a dozen modernwarehouses. Deliveries of dairy productsare valued at $20 million annually.

The organization, owned by 23,000farmers through 23 local creamery coop-eratives, handles 70 percent of the LosAngeles market and a substantial part ofthe San Francisco market. Since 1922, ithas used a revolving capital retains planto finance facilities. By fiscal 1938, near-ly $2.2 million had been retained. By Dec.31, 1938, the cooperative had paid divi-dends of $1 million and held stock cer-tificates totaling $1.2 million.

Challenge has had consistent growth.Butter production, its main line, was 4.5million pounds in 1920. By 1938 its butterproduction has jumped to 41.5 millionpounds. By then, it was also producingcheese, butterfat in cream and milk,sweetened condensed milk, powderedmilk, whey powder, casein, cottage cheese,evaporated milk, condensed skim milk,and 2 million dozen eggs. Challenge alsoprocesses and packages dairy products,including bottled pasteurized milk for dis-

tribution on wholesale routes in Los Ange-les and Oakland, and processed cheese.An ice cream business was the latest addi-tion to the product line.

Pecan Pies, from Georgia to D.C.The 1,000 grower-members of the Nation-al Pecan Growers Exchange at Albany, Ga.,produced 1 million pounds of paper-shellpecans in 1939, enough to make a line ofpies stretching from Atlanta to Washing-ton, D.C. Almost since its inception in1915, the exchange has been trying todevise better ways to prepare nuts for themarket. It used its plant as a laboratoryfor testing ideas to catch the consumer’seye. In the early 1930s, the exchangedeveloped a method of bleaching and dye-ing nuts. By 1938, it began stamping eachnut with the exchange’s trademark and,by 1939, nearly all of the fall and winternuts were branded. Even the equipmentwas trademarked. Most pecans were mar-keted in the East and Midwest.

The organization operates on a “pool”basis. After nuts are graded according tosize and variety, each grower receives anadvance payment according to the gradeand size delivered. After nuts are mar-keted, final payment to members is basedon the quantity and quality of nuts in theparticular “pool” which contained thegrower’s pecans. Most of the co-op’s mem-bers farm in Georgia and Florida. ■

Co-ops Help Expand Wartime Food SupplySome grain cooperatives, anticipating theshortage of storage space brought on byWorld War II, start expanding capacity.But with harvest season approaching,some plants stand idle for want of motors,copper wire and other supplies needed forthe war effort. Wheat is spoiling in NorthDakota and Montana fields for lack ofstorage space.

Ezra Taft Benson, executive secretaryof the National Council of Farmer Coop-eratives, encourages representatives of

farm supply and marketing cooperativesand major farm organizations to form aNational Committee for Farm ProductionSupplies. It handles matters related toagriculture and works with governmentagencies to assure availability of suppliesneeded for USDA’s Food for Freedom pro-gram. This effort involves a majorincrease in food production from Ameri-can farms to support the war effort.

Cooperative Business Tops $2 BillionUSDA data shows that 15,000 coopera-tives were operating in the United States

in the mid-1930s, 295 of which were doing$1 million in business annually while 34did $10 million in business. Collectively,cooperative business in the United Statesexceeded $2 billion annually. Co-ops count3 million members and derive patronagefrom at least another 1.5 million others.This means that 62 percent of coopera-tive patrons are members. And only 85percent of the members are patrons. Thechallenge, a University of Minnesotaextension economist says, is to “convincefarmers of cooperative benefits.”

The solution, he says, lies within thecooperative and how well directors knowtheir local operations. Do they dependentirely on the manager, or are directorsactive in formulating co-op policy? Howwell do they keep advised of changes intheir particular industry and how readilydo they adjust to changes? Do they knowdirectors from a neighboring cooperativeengaged in the same business? Do coop-eratives of a county work together, or arethey suspicious of one another? Wouldacquaintance and confidence result incloser cooperation?


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

These illustrations and photos depict various wartime activities. Above right, Rutherford County (Tenn.)Cooperative Creamery loads cheese for the War Department and promotes war bonds with the artwork on itstruck. Lower right: U.S. cooperatives escaped war damage, unlike this Irish co-op that was hit in a 1940German bombing raid; Above: Uncle Sam pulls the railroad right-of-way levers for accelerated shipment ofhogs, beef cattle and sheep supplies needed for the war effort.

1940s

Dairy Co-op Becomes Part of CurriculumA practical experiment begins in 1940 byVirginia vocational agricultural instruc-tors who are using a local cooperative tosupplement an ag marketing course.Their study and tour of Valley of VirginiaCooperative Milk Producers puts zest andinterest into classes. Discussions with co-op Manager D.E. Shank brings new lifeto textbook concepts of cooperatives.

Auctions Market More LivestockThe increase in livestock sold at local auc-tions attest to the growing trend towarddecentralized marketing of livestock. A1937 Farm Credit Administration surveyshows 1,300 auctions operating in 37states, with 67 percent operating in theCorn Belt. More than 4.6 million headwere marketed. Livestock volume peakedfrom 1934 to 1937 and business volumeaveraged more than $555,000 per year.Marketings in all classes of livestockincreased, except for hogs, which were insharply reduced supply.

Role of Nationwide Cooperatives DebatedThe cooperative movement that has takenhold in the United States during the past20 years or more will continue to develop,

according to A.G.Black, acting governor of the FarmCredit Administration. He said thefield for nationwide cooperatives “isstill an open question; some leadersdoubt whether cooperative activitiescan be successful on a nationwidebasis at this time. Others think there maybe a place for nationwide cooperatives, butthey must be organized and operatedsomewhat differently than some of thosethat have been tried in the past. Nonational marketing program can be devel-oped without giving proper considerationto others in the field. I expect it to be along time before cooperatives can handleall of a given product from the producerto the consumer.”


Trucks hauled logs for the new Doddridge County(W. Va.) Timber Marketing Association to a railyardfor loading into boxcars. Irene Bliss was the first woman to replace a man as a truck driver for the GLF Cooperative at Ft. Plain, N.Y.

Magazine covers from the 1940sdepicted themes such as co-ops vs.private handlers, tobacco and poultrymarketing cooperatives and the growinguse of women in farm production.

Florida Co-op Council FormedRepresentatives of 50 Florida coopera-tives have voted to form a Florida Coop-erative Council to act as the official coor-dinating and policy-forming agencyrepresenting the various agriculturalorganizations, state agricultural institu-tions and grower cooperatives. The coun-cil deals with legislative matters relatedto farm cooperatives, education, organi-zation, research and other matters affect-ing cooperative development.

Message for Younger CooperatorsA sign in front of Litchfield (Minn.)Creamery Co. not only identifies it as a“cooperative owned by farmers and bestmarket for your milk and cream,” but alsoaddresses young farmers. “Your fathersbuilt and supported this creamery. Carry

on their good work through your patron-age.” Manager Emil Oman says the signreminds the younger generation of “whatolder folks were up against when the co-op was formed in 1903. To that genera-tion, the cooperative spirit which madepossible this brick and masonry wasalmost a religion.”

Farm Electrification ExpandsIn 1940, about one-fourth of all farms arereceiving high-line electrical service viaprograms of USDA’s Rural ElectrificationAdministration (REA). Nationwide, about700 local power projects received REAloans. Nearly 300 were in southern states.These projects were providing electricityfor the first time to one-half million farms.Another 1.1 million were slated for elec-trical service via REA projects under con-struction. About 90 percent of the systemsare cooperatives.


Californian Fruit Growers Exchange used a“sectionizer” to promote Sunkist lemons.

Penny-pack raisins were introduced to grocers andwholesalers by periodic promotional post cards andletters devised by Sun-Maid Growers of California.The mini boxes were also used as change forconsumer food stamp program purchases.

MFA at Columbia, Mo., packed its poultry mashes incotton color-fast bags in a variety of patterns so theycould be used in quilts, comforters, bedspreads,dresses, pajamas, pillow cases, men’s shirts and aprons.

Farm Mortgage Loans ‘Paid in Full’Since its formation, the Farm CreditAdministration (FCA) has written “paidin full” on 100,000 farm mortgage loans— more than half of which were madesince 1933. Half of these farmers repaidtheir debt by the late 1930s. FCA officialssay that despite repeated drought and lowprices in some Midwest states, farmersare making faster progress in repayingthese loans than at any time in the his-tory of the program.

Florida Celery Co-op Small But StableAlthough small in membership — it hadonly 12 members when it organized in1930 and 15 a decade later — the Stan-dard Growers Association from SeminoleCounty in Florida is going strong as a cel-ery marketing co-op. From Januarythrough May, more than 500 carloads ofcelery make the trip from the field,through the washer and pre-cooler and

into refrigerated cars for the trip to north-ern markets. Sales by 1939 reached about$125,000.

Hoosiers Buy Federated Co-op WayIndiana farmers have made substantialprogress to improve their purchasing pow-er by developing a federated system oflocal farm supply cooperatives affiliatedwith the State Farm Bureau. The Indi-ana Farm Bureau Cooperative Associa-tion was incorporated in 1925. By 1939,the association’s 60,000 members repre-sented about 30 percent of all Indianafarmers. An equal number were in theprocess of becoming members. Businessvolume in 1937 amounted to $14.5 mil-lion, one-third of sales derived from petro-leum products and one-fifth from feedsales. By 1938, it began making deliveriesto the locals in its own trucks. Soon after,

it began to manufacture fertilizer in a40,000-ton mixing plant at Indianapolisand opened a 2,500-barrel-a-day petrole-um refinery at Mt. Vernon.


A

B

C

D

E

F

G

(A) Cans of milk are delivered to Consumer-FarmerMilk Cooperative’s processing plant at Belle Meade, N.J. (B) Flower-grower members of Greenhouse Flowercooperative In New York City worked together to setthe pace of their industry.C) The Litchfield (Minn.) Dairy reminded youngfarmers of the sacrifices their dads made to build the cooperative.D) Farm labor associations in New York built campssuch as this to house foreign workers. E) Livestock shipping associations, such as this onein Kansas City, had a resurgence in popularity astransportation shifted from rail to trucks. F) Developments in transportation, refrigeration andmass buying prompted fruit and vegetable marketingcooperatives to improve handling procedures toassure product quality.G) Cotton samples are checked at North CarolinaCotton Growers Cooperative Marketing Association.Growers could earn more for better quality if theysold on the basis of grade and staple, instead of thethen-industry standard of “before or after rain.”

Co-op Fertilizer Business AdvancesIn 1923, the Federal Trade Commissionrecommended farmers lower farm pro-duction costs by using cooperatives to buyfertilizer. Fifteen years later, the OhioFarm Bureau Cooperative Associationjoined with Grange League Federationcooperatives of New York to purchase an80,000-ton fertilizer factory at Baltimore.The $350,000 facility manufac-

tured low-cost super-phosphate. Con-struction soon began on Farm Bureaumixing plants at convenient transporta-tion centers in Ohio to help reduce freightrates, which made up nearly 40 percentof the fertilizer cost paid by farmers. Thegoal was to improve both the supply andquality of the fertilizers at reduced pricesand cut the number of analyses. A 20,000-ton mixing plant and warehouse costing$125,000 was added near Cincinnati in ajoint venture of Indiana and Ohio FarmBureau cooperatives. The Ohio associa-tion supplies 15 percent of the fertilizerused in the state. Ohio farmers in the ear-ly 1940s are spending $10 million annu-ally on commercial fertilizers.

Burning Mortgages Co-op CustomCalifornia and Idaho cooperative mem-bers have been burning paid-off mort-gages as a symbolic gesture to celebratemembers gaining complete ownership oftheir facilities. Calavo Growers, a Cali-fornia avocado growers’ cooperative,secured a 10-year loan in 1934 with theBerkeley Bank for Cooperatives. It repaidthe loan in only six years and has nowreached debt-free status. Dairymen’sCooperative Creamery Association of

Boise Valley, Idaho, has also paid off itsloan thanks to the $500,000 membersinvested in their cooperatives during itsfirst 15 years. The business has a networth of almost $400,000. Achieving suchgoals took years of advanced planning,said Tom Stitts of the Farm CreditAdministration.

Phone Mutuals Serve 500,000More than 30,000 mutual associations areproviding telephone service on a cooper-ative basis to almost a half million farmhomes. Some are large and operate com-plete telephone systems. Others are infor-mal groups of farmers and rural peoplewho have pooled their efforts and con-structed neighborhood lines. In manyinstances, these cooperatively operatedlines provide the only telephone serviceavailable in a community.

Co-op Traffic Departments Control CostsWith farmers spending millions of dollarsannually on freight charges, cooperativesare finding traffic departments helpful inpruning unnecessary distribution costsand increasing savings for members. Five


Cartoons such as this were used in the magazine topromote good cooperative practices, such asencouraging members to attend and participate inannual meetings.

farm supply cooperatives in the north cen-tral states formed a joint transportationcommittee to discuss creating a mutualto deal collectively with transportationagencies. They are considering variousways to cut costs.

Illinois Co-op Supplies Certified SeedAn Illinois cooperative first formed in1925 and later reorganized as ProducersCrop Improvement Association at PiperCity, Ill., has certified the quality of thehybrid seed corn it produces or process-es. With financing from the St. LouisBank for Cooperatives, a modern seedplant has been built and sales of seed cornnearly tripled from 1938 to 1941. Certifi-cation is based in part on field inspectionand checking for grade and disease. Ger-mination tests are conducted for each bagof seed corn.

Farmers’ Cooperative Markets PopularPublic market cooperatives that sell farmproduce are gaining in popularity in NewYork, Pennsylvania, Massachusetts andRhode Island. In New Jersey, PattersonMarket Growers Cooperative Association

is leaving its small, crowded facilities fora spacious building in a new farmers mar-ket. In New York’s Albany-Troy market,Capital District Cooperative has built anew market on a 25-acre tract adjacentto a major highway and a railroad.

War Prompts Changes in Co-op OperationsIn response to World War II, cooperativeshave tightened, expanded or consolidatedoperations — changes that some say werelong overdue. The 860-member Ellsworth(Wisconsin) Cooperative Creamery hasreversed a 25-year-old policy under whichit produced more than 1.6 million poundsof butter for the New York and Chicagomarkets. It has now switched to produc-ing nearly 10,000 pounds of edible milkpowder in a new plant addition. NorthCentral Kansas Cooperative Creameryadded new vats to boost daily cheese pro-duction to 4,200 pounds.

Farm tractors and armored tank partsare moving off the assembly line atNational Farm Machinery Cooperative atShelbyville, Ind. In Louisiana, coopera-tive cane sugar mills are offering theirfacilities to crush sorghum to derivemolasses for alcohol. A tung oil coopera-

tive in the South has arranged to crushpeanuts to produce more oil. A Californiagrain cooperative has remodeled truckbodies to handle more bulk grain andeliminate the need for bags. Eastern fer-tilizer cooperatives are turning to bulkshipments. Wool co-ops are consideringuse of cotton gin equipment to bale wool,cut use of burlap, and reduce the shippingspace required by bags.

To conserve rubber and labor, dairycooperatives are consolidating milk routesand cutting back to every-other-day deliv-eries. They are also improving co-op pub-lications to keep members informed and


Challenge Cream and Butter Association at LosAngeles,. Land O’Lakes at Minneapolis and FarmCredit Administration were among cooperativesusing radio shows to promote their products

thereby reducing the number of meetingsand related travel. Some co-ops are pro-moting more store sales. More local co-ops have been formed for more efficientassembly and distribution of livestock,fruits and vegetables, poultry and eggs.Eaton (Georgia) Cooperative creamery isselling nearly half its 4,500-gallon dailymilk volume to nearby U.S. Army bases. Acooperative formed in Brighton, Colo., ishandling scrap iron for the entire countyby collecting old machinery, which it dis-mantles, tags and stores.

Minnesota Cheese Exported to EnglandNine Minnesota cooperative creameriesoperating in a 20-mile radius of Fairbaulthave temporarily diverted their wholemilk supplies to the central cooperativeto produce carloads of cheddar cheeseeventually destined for England. All weretoo small to afford installation of neededvats for expanded cheese productionwhich was providing better returns thanbutter. Local organizations have beenkept intact for eventual operation on apeacetime basis.

Two Letters ‘Create’ Co-opOn the surface, it appeared to happenalmost overnight. All it took was addingtwo letters to the corporate name to con-vert 10-year-old Rochester (Minnesota)Dairy Co. into Rochester Dairy Coopera-tive. The co-op is owned by more than1,250 farmers. St. Paul Bank for Cooper-atives developed the plan. The 140 pro-ducers supplying the original companyand other area distributors were part ofa dairy bargaining association. The con-version was brought on by the need toraise additional capital so the cooperativecould expand operations, allowing it tohandle 400,000 pounds of milk per dayand produce up to 1,200 pounds of driedmilk per hour.

Co-op Adds Machinery ServiceTo help members meet production goals,the Vermillion Farmers Cooperative Asso-ciation in Louisiana — organized as a ricewarehouse in 1920 — has added amachinery repair department, including areplacement parts operation. Membersrequiring repair service can bring farmmachinery into a central plant or requesta truck and repair crew to visit theirfarm. The repair service is generatingabout $45,000 annually in sales, with sav-ings returned to members at year-end,based on their use of the service.

Florida Orange Concentrate Bound for YanksSixty boxcars of fresh citrus fruit a dayare being processed by Florida CitrusCanners Cooperative at Lake Wales.About 40 of those boxcars of fruit are con-verted into 8,000 gallons of orange con-centrate destined exclusively for the Unit-ed States armed forces and their allies.Total volume of concentrate was expect-ed to reach 800,000 gallons. When recon-stituted on the basis of 7 gallons of waterto a gallon of concentrate, it will produce6.4 million gallons of juice with vitaminsadded. All will be shipped under the co-op’s Donald Duck brand. Concentrate pro-duction has been boosted by the need toreduce shipping space. Concentraterequires only about one-eighth of whatfresh fruit requires.

Indiana Co-ops Supply Wood to Save SteelAn Arkansas forest, logging equipment,trucks and two sawmills have been pur-chased by a subsidiary of Indiana FarmBureau Cooperative Association. Its mem-ber cooperatives have developed a sidebusiness, supplying wood for farm build-ings and equipment usually made of steel.Hog and brooder houses and feeders are

available in either ready-built or to-be-assembled form.

Co-op Becomes Major Grain MarketerWith the purchase of 135 country grainelevators and 35 lumber yards, FarmersUnion Grain Terminal Association (GTA)at St. Paul, Minn., is now the nations’slargest grain cooperative. The acquisitiongives GTA 450 facilities it either owns oris affiliated with. Asset value of the newelevators exceeds $2.7 million. Most arelocated on the Great Northern Railroadright-of-way in Minnesota, Iowa, theDakotas, Nebraska or Montana. Thisregion accounts for most of the nation’sdurum wheat production.

Co-op Dividends in New Milk HousesMembers of Wisconsin’s ConsolidatedBadger Cooperative have received“improvement bonds” for their 1942 divi-dends. Rather than more dollars in theirbillfolds, they are earning a new milkhouse, cow clipper, an electric hot waterheater or a milk house stove. The bondscan only be used to purchase either equip-ment or supplies that improve their farmmilk-producing facilities, or Badger pre-ferred stock. Directors believe the bondswill accomplish 10 years of milk qualityimprovements within only three years.

Forest Product Co-ops Blaze TrailsAlthough limited in number, forest prod-uct cooperatives are blazing new trailsthanks to wartime needs and the eco-nomic value of farm woodlots. Otsego For-est Products Cooperative at Cooperstown,N.Y., has contributed 15 percent to thenet income of dairy farms in the region.Farmers Federation in North Carolinaeffectively markets forest products as anadditional service to members. Rock Coop-erative in Michigan — formed in 1913when mines in the area began closing —


saw business volume peak in 1930 at2,000 carloads of lumber valued at$265,000. But by 1943, its marketingsproduced only $21,000. The cleared for-est land is now devoted to income-pro-ducing crops and pasture. The coopera-tive increasingly provides farm supplies.The new Doddridge County CooperativeTimber Marketing Association in WestUnion, W. Va., had net receipts from for-est products of $30,000 during the firsthalf of 1945. It plans to operate a sawmill.

Co-ops Should Anticipate Post-War AdjustmentsCooperatives will be challenged toimprove their services in the face of theprice and other adjustments during thepost-war period, predicts O.B. Jensess,chief agricultural economist with the Uni-versity of Minnesota. “Cooperatives arein the position to supply leadership inworking for improvements and in hold-ing in check unwise developments...Bet-ter grades and standards often are need-ed. Cooperatives can help here and be ofservice in locating new outlets and newuses for the products they handle.”

Doing the ‘Turkey Trot’ at EllsworthLong after the “turkey trot” dance waspopular, Central Cooperative Turkey Pro-ducers has been formed at Ellsworth,Iowa, and built a processing plant. Itserves 50 producers within a seven-mileradius who market 4.5 million pounds ofdressed turkey through their cooperative.Savings during the first two years of oper-ations were enough to pay for the totalcost of the building and equipment. Mem-bers received $1.25 million for their birdsin 1946, much of which was spent in thecommunity. The cooperative chips inanother $40,000 annually in local oper-ating expenses and nearly $60,000 inemployee wages.

Farm Organizations Back Locker PlantsWith the backing of major farm organi-zations and regional cooperatives, lockerplant associations are flourishing in manyrural communities. Most were concen-trated in Midwest, Pacific Northwest andNortheast states, plus Texas and Virginia.Seventy were associated with LandO’Lakes, 9 were promoted by SouthernStates, another 7 were organized,financed and operated by Farmers Fed-eration of Asheville, N.C., and a few wereunder the umbrella of New York’s GrangeLeague Federation.

Fruit Growers Maintain Uniform PackIllinois Fruit Growers Exchange at Car-bondale was formed by 15 packinghous-es in 1921 that needed an overhead mar-keting agency to coordinate carlot sellingand shipping rather than relying on con-signment outlets. Today, in 1948, its 139farmer members and four associationmembers are doing an annual businessof more than $1 million. It handles amajor volume of fresh fruits and vegeta-bles under a marketing plan that main-tains a uniform pack of No. 1 grade underthe Illini brand.

Co-op Thrives in Deserted MillSixteen cooperative gin associations inTexas raised $22,500, 22 local citizenspurchased $6,000 in preferred stock and aloan from the Houston Bank for Co-opscovered the rest of the cost to help a newcooperative buy and modernize a cotton-seed mill at Wolfe City in 1939. It hadbeen idle for seven years. Eight years lat-er, in 1948, the vision of Ne-Tex Coopera-tive Oil Mill members has paid off. Thecooperative is debt free; $329,000 in cashpatronage was distributed in 1948; andmembership has expanded to include 49

gin associations serving more than 10,000cotton farmers in a 60-mile radius ofWolfe City.

Rice Growers Expand Co-op DryingMarketing cooperatives or their sub-sidiaries in principal rice-growing stateshave joined an industry trend byinstalling artificial dryers and expandingstorage capacity as a service to theirmembers. Uniform drying increases theyield of whole rice grains in milling oper-ations by reducing breakage. In 1946, 15cooperatives with a combined rice dryingcapacity of nearly 9.5 million bushelswere operating in the primary rice grow-ing states. Another 11 driers under con-struction boosted capacity 62 percent tomore than 15.5 million bushels. The num-ber of driers has increased 70 percent.

Grain Co-ops Expand CapacityIn response to a surging demand, manyof the nation’s local and regional graincooperatives are modernizing their oper-ations with expanded storage capacity,larger truck scales, faster car loadingequipment and automatic scales. Theyoffer grain drying and hedging service,custom feed grinding and mixing, and dis-tribution of seed, fertilizer and petroleumproducts. In Kansas alone, local graincooperatives are completing work on 20new elevators, each with a capacity of100,000 bushels or more.

Use of barges on the Mississippi andother major rivers has helped speed themovement of post-harvest grain from theelevators to distant markets. IllinoisGrain Terminals has exapnded its IllinoisRiver system to five terminals to mer-chandise more grain from Farm Bureauaffiliates. Illinois Grain Corporation, acompanion statewide cooperative, pro-vides brokerage and commission servicesto its locals. ■



National Grape Buys WelchThe transaction was five years in themaking and of a magnitude that had nev-er before occurred in U.S. agriculture. Butto the 4,600 Concord grape grower-mem-bers of National Grape Growers Cooper-ative at Westfield, N.Y., who invested $15million, it meant buying the top namebrand in the business: the Welch GrapeJuice Co. Even though the associationwas formed in 1945, it took until 1952 forthe idea of owning the processing compa-ny to jell.

To finance the transaction, growersreceived cash for their grapes from Welchat above market prices. They received anadditional 10 percent of net sales in theform of allocation certificates due in 20years, retroactive to the 1951 crop. Whenthe fund reached $15 million, the cooper-ative exercised its option to purchase. Thecooperative gave Welch a mortgage forabout $13.5 million to cover net currentassets, including supplies, grape juice andother products ready for sale, improve-ments to plants, two new plants acquiredsince 1952, plus goodwill and trademarks.Growers applied 10 percent of the netsales to begin paying off the mortgage.

Cooperative Fertilizer Market GrowsFertilizer programs of cooperatives havecome a long way since the days of the firstcar-door delivery of plant food materialsto farmer members. During 1950-51, sup-ply co-ops grossed $256 million from fer-tilizer sales. Steady growth in this sectormeans that today, in 1953, 65 cooperativesown 111 fertilizer facilities. Of these plants,21 manufacture normal super-phosphate.They range in size from small dry mixingplants of 5,000 tons up to plants with acapacity of 80,000 tons or more. Thegrowth of regional cooperatives such asCentral Farmers Fertilizer Company ofChicago (later CF Industries) gave farm-ers a foothold in the production of the pri-mary sources of nitrogen and phosphate.

Cooperatives Integrate Petroleum OperationsAfter the initial growth of local petrole-um retail cooperatives and the first coop-erative refinery in 1939, 11 refineries arebeing operated by 13 regional coopera-tives in 1957. Total crude distillationcapacity is 155,700 barrels a day. Totalthermal cracking capacity of nine refiner-ies was 25,925 barrels a day, or 1.2 per-cent of the total national capacity.

Apple of the Eye: Lucky LeafT’was more than luck that put the LuckyLeaf brand of fruit products on the dinnertables from Maine to California and morereturns into the pockets of growers. Plan-ning, hard work, cooperation and mer-chandising knowledge have made KnouseFoods Cooperative Inc., of Peach Glen, Pa.,one of the four major apple processingfirms in the United States. While net earn-ings have been distributed annually sincethe cooperative was formed in 1949, peakreturns of nearly $1 million were made in1954. Fruit growers in the four-state areaof the southern Appalachian fruit-belt mar-

1950s

Checking on feed bags at the Progressive FarmersCo-op at Sumter, N.C., which opened its newbuilding in 1954. The 100-member cooperative alsohandled other farm tools and supplies, fruits,vegetables, appliances and groceries.

Compact, 50-pound bales of cotton helped Calcot Ltd.of Bakersfield, Calif., cut air freight cost by a third.

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

Co-op Brands Gain Market Share; Livestock, Tobacco, Cotton Co-ops Expand

ket their foods in many forms, rangingfrom apple sauce and red sour cherries topeaches and fruit pie fillings.

Co-op Tobacco Warehouses FlourishCooperatives were new to the North Car-olina tobacco country when some of themformed in the late 1940s. The GrowersCooperative Warehouse at Wilson, 40miles east of Raleigh, is the world’slargest brightleaf tobacco market and wasthe first to be formed. To supplementstart-up capital invested by producers,the cooperative negotiated a loan with theColumbia Bank for Cooperatives to pur-chase an 11-acre tract and build its ware-house. In each of its four years of opera-tion, the co-op led the Wilson market inpounds of tobacco sold from a single ware-house floor. During the 1951 season, ithandled 7.8 million pounds of tobaccoworth $5.2 million.

Farmer Cooperative Service Is BornCongress had been appropriating fundsto support the development of agriculturalcooperatives for 40 years. Now, in 1954,it has formalized this assistance with thecreation of the Farmer Cooperative Ser-vice (FCS) as part of the U.S. Departmentof Agriculture. This action comes on theheels of the Farm Credit Act of 1953 andthe reorganization of USDA. The FarmCredit Administration, which had con-tained the cooperative program, is nowan independent entity outside the gov-ernment. FCS programs are carried on bydivisions for marketing, purchasing, man-agement services. “News for FarmerCooperatives,” a magazine, and other bul-letins and reports are edited and issuedby an information division of the FarmerCooperative Service. The agency’s newadministrator is Dr. Joseph Knapp.

MFA Sees 40 Years of ProgressWilliam Hirth, editor of the “MissouriFarmer and Breeder” magazine in theearly 1900s advocated the need to remedya “sickening agricultural situation” byencouraging Missouri farmers to increasetheir bargaining power through coopera-tives. As a direct result, seven farmersformed the foundation of Missouri Farm-ers Association (MFA), which is markingits 40th anniversary in 1953. MFA’s busi-ness volume has reached $300 million andthe cooperative serves 150,000 members.

Dairy products are disbursed fromMFA creameries strategically locatedthroughout the state. Farmers purchasenearly $2.5 million in farm productionsupplies annually from MFA and it is thelargest producer and processor of certi-fied seed and the largest distributor ofseed corn in the state. A substantial por-tion of commercial fertilizer used by Mis-souri farmers is manufactured and dis-tributed by MFA. The cooperativeoperates 47 bulk fuel plants and morethan 67 service stations that distributeoil, gasoline and grease. It operates two


Studio lights brighten the set so that television cameras can broadcast a demonstration of how Co-op GlowCandles are made by the Pacific Supply Cooperative at Walla, Walla, Washington.

Copies of “Today’s Farmer” magazine, published bythe MFA cooperative, roll off press.

This cartoon illustrated a magazine article titled“Employees Produce More When They Share More.”

refineries that produce petroleum prod-ucts. More that $23 million in grains issold through MFA Grain and Feed Co.MFA also provides marketing services anda hatchery for poultry and egg producers.

‘Hayburners’ Gone, But Florida Citrus Rolls OnWaverly Growers Cooperative of Florida—founded four decades ago — originallytransported the citrus of its members byold, reliable “hayburners” (horse-drawnwagons) which often had to delve throughdeep sands. In time, the hayburners werereplaced by powerful trucks and trailerswhich haul fruit to modern packinghouses.Crop volume has expanded from 9,725boxes annually in the co-op’s early days to2.5 million boxes. Grower equity has grownfrom almost nothing to $2.4 million.

By its 40th birthday, Waverly joinedwith five other citrus cooperatives to formFlorida Canners Cooperative at LakeWales. This cooperative provides cost-sav-ing orchard caretaker service for about

90 percent of member groves and has per-fected a seasonal pooling plan. The co-opobtains crates from a cooperative withsawmills and large timber holdings inFlorida and Georgia. Through AssociatedCooperatives at Sheffield, Ala., it securesmanufactured fertilizers. It helped orga-nize Florida Citrus Mutual, with a mem-bership of 7,000 growers representing 80percent of the Florida citrus crop.

Wheat Co-op Responds to BakersThe Farmers Cooperative CommissionCo. of Hutchison, Kan., a regional coop-erative serving 121 local cooperative ele-vators, has tuned in to what the bakingindustry is saying: “The variety of wheatyour members produce for high yields isnot suited to our needs for gluten-strengthflour, which affects our baking results.”Today, in 1954, the cooperative is meet-ing the problem head on with an experi-mental mill to test wheat qualities forbaking qualities. It is giving growers abetter market by telling millers how wellmembers’ wheat will perform for the bak-er after milling.


Pure Milk Association introduced a one-third quart of milk concentrate on the Chicago market, which attracteda large amount of media attention.

This cartoon from 1955 contrasted the differencesbetween cooperatives in the 1920s and the 1950s.

Land O’ Lakes used “milk automat” vendingmachines to market half-gallon cartons of milk.

United Farmers of New England, headquartered inBoston, introduced “pitcher pour” half- gallon cartonsof milk in a media blitz that included streetcaradvertisements and store promotions in 1954.

Potato Growers Lure Buyers With Co-opA cooperative formed by 16 potato grow-ers in the north of lower Michigan is suc-ceeding in attracting new buyers andexpanding markets. With help from theircounty extension agent and staff of Michi-gan State College, the growers formedEmmet County Growers Cooperative, Inc.,at Petosky. Previously, their location putthem at the end of the buying chain, oreven shut them out of the market. Thecooperative is enabling them to produceand market a uniform, high-quality“Straits” brand potato, demand for whichis high. Net returns are increasingbecause their product attracts higher thanaverage prices for that area. Memberranks have quickly swelled to 38 growers.

Diamond Walnuts Called “Brand of Choice”Like many food products developed byfarmer-owned cooperatives, the qualitywalnuts sold under the Diamond brandlead the industry for customer demand.The California Walnut Growers Associa-tion of Los Angeles, now 40 years old, hastied product quality to an aggressive mar-keting program. It took seven years todevelop the machine that stamps the Dia-mond brand on each first-grade walnutshell. The association represents 25 localcooperative associations, 11,000 growersand 80 percent of the walnuts grown inCalifornia.

One-Stop Service for Texas FarmersAlthough the Brownsville (Texas) CottonGin has never bought a bale of cotton, ithas sold more than 43,000 bales since itwas formed in 1947, or nearly 92 percentof the bales ginned by the association inits seven years of operation. The market-ing service was started by the originalboard of directors. Farmers agreed to pay

$150,000 for a modern gin that they knewwouldn’t be paid off unless existing localcooperative marketing practices wereimproved.

Annual ginning volume averaged 7,000bales. A second gin plant was added in1951 to handle increasing member vol-ume and increasing facility investmentsto $1 million. The cooperative also has$64,360 invested in Valley Co-op Oil Millat Harlingen, Texas, and it buys pure cer-tified seed from the Texas Planting SeedAssociation, of which it is part owner.

Home Freezers a Boon to Locker PlantsFrozen-food locker plants are expandingmarketing efforts by provisioning homefreezers. A survey of 10,553 frozen foodplants by the Farmer Cooperative Servicehas revealed that about 1,700 qualify asfrozen food provisioning plants. Theseplants extend credit for more than 60 daysfor bulk food purchases of their patrons.

Half of the freezer provisioning plantsare in communities of more than 5,000,while only a quarter of the locker plantswere in towns of that size. The majorityof both types of plants are individuallyowned. Cooperatives are less likely toinclude a home freezer provisioning fea-ture in their operations.

Co-op Credit Increases About 10 PercentFarmers and their cooperatives borrowedmore than $3.3 billion in 1957 from thenationwide Farm Credit System, settinga new record by increasing the amount10 percent, or $368 million, from 1956. R.B. Tootel, governor of the Farm CreditAdministration, says the growth of cred-it is due to “the continued rise in farmingcosts and farmers’ efforts to improve theefficiency of their operations by develop-ing optimum, family-size mechanizedfarming units.”


Southern States Cooperative, Richmond, Va., used a“mobile dairy” in the 1950s to demonstrate its lineof milking equipment.

Broiled lamb chops were promoted as food thatshould appeal to weight-conscious consumers in a17-week ad campaign launched by ProducersLivestock Association of Salt Lake City, Utah. The co-op claimed it helped spark a 68-percent upsurge indemand in areas where it ran.

More than 2,400 marketing and pur-chasing cooperatives borrow from thebanks for cooperatives. At the end of 1957,their loans outstanding from the bankstotaled $454 million compared with $457million in 1956.

Poultry Co-ops Benefit from Trucking RulesLower rates and better service are theprincipal benefits arising from the inter-state trucking of fresh and frozenprocessed poultry products under theagricultural exemption clause, accordingto a nationwide survey of poultry proces-sors and motor carriers conducted by theUSDA. The exemption refers to the MotorCarrier Act of 1935, as amended. In a pairof court decisions, the latest in 1956, theU.S. Supreme Court affirmed a decisionby a Texas district court that both freshand frozen dressed poultry came underthe agricultural exemption clause.

Cooperatives have an interest in theexemption because they market 6 percentof the entire U.S. volume of broilers andother poultry except turkey. In 1956, thisamounted to 213 million pounds (fresh-cooked weight). Farmer cooperatives alsomarketed 16 percent of the total U.S. pro-duction of turkeys in 1956.

Taft Benson: Co-ops Must Adjust to “Stupendous Changes”Speaking at the 30th annual AmericanInstitute of Cooperation at PennsylvaniaState University, Secretary of AgricultureEzra Taft Benson outlines the importanceof tasks facing cooperatives in an age of“stupendous change and continuingbreathtaking challenges.” These includethe need to maintain producer controlover farming, preserving the family farmand exerting effective bargaining power.

“Farmers must mold economic inte-gration themselves to make sure it ade-quately serves farm interests. They mustcreate new opportunities for themselvesthrough joint efforts,” he says. Bensonwarns against complacency despitenotable progress in integration and con-solidation. He outlines a four-part pro-gram: 1) Build your cooperative bigger inmembership, resources, research and ser-vices you render; 2) Be satisfied withnothing less than top-notch leadership indirectors and management; 3) Bringabout more cooperation between cooper-atives; 4) Build a better press and publicrelations program.

Benson says it is almost impossible toover-estimate the value of farmer cooper-atives. “Those of us who believe in farmer

cooperatives must be vigilant to see thatthe public is fully informed... Farm peo-ple have come a long way in cooperationwith one another. Working together, theycan exert effective bargaining power andmaintain control of farming. They canpreserve the traditional family farm.”

Wisconsin Livestock Co-op Blazes TrailFor a state that had a dearth of livestockcooperatives despite its long history as aleading co-op dairy state, the new Equi-ty Cooperative Livestock Sales Associa-tion at Milwaukee has set a torrid pacein its first 18 months. It set up five live-stock auctions around the state — a firstfor Wisconsin — even though auctionswere prevalent elsewhere in the country.C.M. Chalfin, Equity’s general manager,and Milo Swanton, executive director ofthe Wisconsin Council of AgricultureCooperatives, led the fight to get the bru-cellosis control law on Wisconsin’s booksamended so cattle going to slaughtercould be sold at an action without thistest. It allowed the state’s farmers to keeppace with those in neighboring states.

Establishing the auctions involvedmember relations, public relations andthe cooperation by the Agricultural Exten-sion Service and many others in the state.Equity representatives held townshipmeetings across a 10-county trade terri-tory for the pilot auction at Richland Cen-ter. County meetings were conducted withkey farm groups. Cooperative staffers, dis-trict extension men and county agentsparticipated. They spoke at co-op annualmeetings and other farm meetings, ser-vice clubs and vocational agricultureclasses. They also used the cooperative’smonthly newsletter to spread the word.Existing cooperatives were used as allies.Farmers selling at the cooperative live-stock auctions are getting better prices,have fewer shipping losses and get paidfor quality and merit.

Equity also has been selling purebred


USDA’s Farmer Cooperative Service distributed 4,300 copies of cooperative publications from this booth atthe 1955 American Institute of Cooperation at Purdue University.

Wisconsin Holstein heifer calves for airshipment to dairymen in distant statessuch as Idaho, Tennessee and Kentuckyfor dairy herd replacements. It is air-ship-ping mature dairy cattle to locations asfar away as South America.

Ohio Expanding Co-op Education EffortsTeamwork among farmer cooperatives,agricultural extension agents and voca-tional agriculture teachers in Ohio isresulting in popular and effective ways ofshowing young people why cooperativesare so important to farmers and ranch-ers. More than 1,500 members of 4-Hclubs and Future Farmers of Americachapters participated in 16 field days heldon farms around the state. At each event,students learned from producers andcooperative representatives why co-opsare vital to farmers.

The idea came from Max Drake, pres-ident of the Ohio Council of Farmer Coop-eratives, following discussions with exten-sion and agricultural education staff atOhio State University about the need todevelop more effective methods to teachcooperative principles to young people.

All Ohio cooperatives were invited tosend representatives to district meetingsof extension agents and teachers to pre-sent field day plans. The area events werefirst staged during the summer of 1952.Farm radio directors throughout the stateserve as masters of ceremonies and inter-view host farm families and representa-tives of each cooperative, stressing howco-ops bring modern business services tothe farm.

Another state council education pro-gram, also conducted in cooperation withOhio State University, involves creatingmore contacts between cooperative man-agers and vocational agricultural instruc-tors — 40 percent of whom have been onthe job three years or less. Very few ofthese teachers learned anything aboutcooperatives in college and many have

had only limited experience with co-ops. Arecent survey shows that 90 percent ofthese teachers are giving some instruc-tion on cooperatives, but only 12 percentare visiting these associations or invitingmanagers to talk to their classes.

Dairy Co-op Promotes Bulk Milk TanksThe bulk system of handling milk to sup-ply the Washington, D.C., market, isbeing advanced by the Maryland and Vir-ginia Milk Producers Association Inc.,which has represented producers for 32years. During the past two years, thecooperative has been developing bulkpickup of its members’ milk.

The cooperative helps producers adjustto this big change and even helps financethe initial investment by buying farm bulktanks in carload lots to lower the price.

Co-op fieldmen are providing individ-

ual assistance to producers to help themmake the switch to the new system. Pick-up routes have been reorganized as morebulk tanks come into service. More than120 farms receive daily tanker pickups.Average herd size for the co-op’s 1,800members is 40 cows, although some milk100 cows or more. Members produced anaverage daily milk volume of 800 poundsin 1951. Tanker trucks serve an averageof nine patrons on each route, which aver-age 100 miles, round trip.

The bulk milk system first appearedin the Los Angeles area in 1948, and grad-ually has become well established in atleast 16 other states. Twenty-one dairycooperatives currently use bulk pickup tosome degree.


At its 40th anniversary in 1955, Waverly ( Fla.)Growers Cooperative featured women in Civil War-era clothing at its headquarters.

Avocadoes from Calavo Growers of California wereused in a fall fashion display show at a majordepartment store in Washington. D.C. Fashions were,naturally, mostly in avocado green.

With a little help from Miss Super-cargo of the Day,Priscilla Keays, Sunkist Growers of California shipped135,000 boxes of Valencia oranges to Europe.

Livestock Service Co-ops GainingAbout one million livestock farmers andranchers have banded into cooperativesfor marketing services. Both membershipand volume of livestock marketed by coop-erative have been gaining during the pastdecade. Cooperative interest is also stir-ring in the South, where beef productionhas outstripped marketing facilities. Cot-ton Producers Association of Atlantaopened a livestock department in 1952.It plans to lease or purchase local stock-

yard facilities at strategic points in Geor-gia or build new facilities and bring theminto the central organization. The Mid-South Cotton Producers operates a live-stock department at South Memphis(Tenn.) Stockyards.

Meanwhile, western stockmen gainedanother cooperative livestock marketwhen Producers Livestock MarketingAssociation of Salt Lake City, Utah,opened facilities in Billings, Mont. Thecooperative has six branches covering 11western states.

The livestock cooperatives are still rid-ing the tide of decentralized marketingthat began in the 1920s. New local mar-kets were opened by several Corn Beltcooperatives in 1952. Farmers now havememberships in 38 large-scale, regionaland terminal marketing associationsoperating on 29 livestock markets of thecountry. Fifteen of the cooperatives oper-ate 100 branches at other terminal andcountry markets, making a total of 129markets served.

Co-op Gin One Man’s IdeaSometimes all it takes is the perseveranceof one person to spark development of acooperative. Grant Cotton Gin Coopera-tive at Marion, Ark., is largely the dreamof John Gammon, who resigned from theResettlement Administration (forerunnerof Farmers Home Administration) to oper-ate his father’s cotton farm and led effortsto build a $70,000 cooperative gin. Thecooperative started in the late 1940s with54 holders of common stock, each of whomwho invested $10. Another 45 sharehold-


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

“Ma has parked her shoes, but keeps up with Pa andthe ‘young fry’ in a ‘grand right and left’ at a familycamp sponsored by the Consumers CooperativeAssociation, Kansas City, Mo.”

ers paid $100 per share for preferredstock. Five years later, the co-op was stillpaying a dividend on preferred stock andmaking an annual profit. The gin aver-ages 2,000 bales per year and pays anannual refund or rebate of $3.50 per baleto participating producers.

A fire in 1951 ravaged the original$130,000 gin of Mound Bayou (Miss.) GinAssociation, the brainchild of three pro-ducers, but due to wartime restrictionson building materials, a new gin couldn’tbe built. So the board looked around and

purchased, moved and improved an oldgin located in Earl, Ark. It was partiallyfinanced by a loan from the New OrleansBank for Cooperatives. Despite its smallmembership, the cooperative has nevermissed handling a single crop. And it hassteadily gained new business.

REA Loans Modernize Farm PhonesMany farms now have modern, dial-tele-phones thanks to legislation passed in1948 which made loans available from the

Rural Electrification Administration(REA) to modernize the phones used byfarmers. The share of American farmswith telephones passed 42 percent by1952 and was growing. Well over 200 rur-al telephone associations had obtainedREA loans to install dial equipment. In1953, a cooperative in New Mexico hadcompleted the first part of a system serv-ing people who previously had to travel70 miles to access a telephone. ■



Dairy Co-ops Expanding Grade A Milk OperationsOriginally established to manufactureungraded milk, many dairy cooperativesare expanding to include Grade A fluidmilk production, matching an overallindustry trend. USDA’s Farmer Cooper-ative Service (FCS) surveyed 124 dairymanufacturing cooperatives in Minneso-ta, Wisconsin and Iowa. FCS also ana-lyzed three cooperatives experienced inhandling Grade A milk from 1955-58. Thestudy shows that cooperatives shouldcarefully appraise the adequacy of fluidmarkets and the costs of adding facilitiesfor Grade A milk. By participating in thefederal milk order markets, such as theorder for the Chicago area, many cooper-atives are successfully developing new

programs. For other smaller manufac-turing plants, participating in the GradeA market has not been — and may nev-er be — possible, short of merging withneighboring cooperatives.

Pacific Co-op Petroleum Patterns ChangingPetroleum, the original “pack horse” thatcarried Pacific Supply Cooperative (PSC)at Walla Walla, Wash., through its earlyyears, still accounts for about half the co-op’s annual sales volume. But it has nowbeen joined by an array of production sup-plies such as fertilizer, hardware, feed andautomotive supplies. It also markets grainand seed. Business volume for 1959reached nearly $31 million. PSC supplies120 local cooperatives which serve

100,000 farmer-members in Washington,Oregon and Idaho. PSC recently openeda $2 million petroleum marine terminalon the Columbia River at Vancouver,Wash., with a storage capacity of morethan 13 million gallons. Six river barges amonth, each toting 200,000 gallons ofpetroleum, carry the bulk fuel furtherupriver to PSC local cooperatives. The ter-minal project was financed with the co-op’s operating capital, preferred stock soldto members and a loan from the SpokaneBank for Cooperatives.

Steps Suggested for ImprovingMember RelationsBecause cooperatives are owned by theircustomers, a good member relations pro-gram is a must. The important first stepis to settle on as program and then active-ly follow these suggested ideas: developevery director and employee into a friend-ly salesman for the co-op; make eachannual meeting a red-letter day; holdadditional membership meetings whenwarranted; prepare a good annual report;issue a periodic membership publication;prepare special leaflets for members; dis-tribute selected educational materials;maintain an up-to-date mailing list; sup-ply news regularly to local newspapersand magazines; use the local radio andtelevision to carry news about your co-op;foster the family approach to memberrelations; provide cooperative education-al opportunities for rural youth; maintainan attractive headquarters and facilities;cultivate friendly community relations;and cooperate with other cooperatives.

Kansas Co-op Bolsters Its Public RelationsReaching the people touched by coopera-tive activities is the primary aim of thepublic relations program for the FarmerCooperative Commissions Co. at Hutchi-son, Kan., which serves its 131 local asso-

1960sTrend Toward Fewer, Larger Farms Means Major Changes for Co-ops

President John Kennedy greets 500 cooperative leaders attending the 1963 National Conference onCooperatives and the Future during a ceremony at the White House Rose Garden.


ciations in central and southwest Kansas.A series of six advertisements are run-ning in local papers to promote the ideathat the regional and its member localsare a valuable asset to the business andeconomic life of the area.

Local cooperative associations have acombined annual payroll of more than$4.5 million and returned $6.5 million insavings to members — an annual contri-bution of $11 million into local communi-ties to stimulate business. The coopera-tives also pay plenty of taxes. In one smallcommunity alone, it pays 37 percent of allpersonal and property taxes. In many cas-es, the local cooperative is the largest userof local labor.

Using a common theme, “How Do YouMeasure the Value of Your Local Com-munity Institutions?,” the ads ask read-ers what the cooperatives means to thecommunity. These following headlines topthe ads: People working together; Home-owned; Community responsibility; Morelocal business; Shared by everyone; Pay-ing taxes.

USDA Double-A Shield OKedLake to Lake Dairy Cooperative at Man-itowoc, Wis., is the first cheese manufac-turer in the United States to qualify forusing USDA’s Grade AA shield on itscheese labels. Consistently producing onlythe highest quality cheddar cheese hastaken Lake to Lake “from an art to a sci-ence in cheese making,” says GeneralManager Truman Torgerson.

Liquid Fertilizer Use GainingTo illustrate the growth in liquid fertiliz-er service by Midwest local cooperatives,USDA/FCS has conducted a study of 17cooperatives in Nebraska and Kansas.

Peruvian Indians work on the potato harvest outsidea parish in San Juan, which sponsored a credit unionto finance a local farm supply business andcooperative housing.

Mechanized harvest is underway near a rural church in the Dakotas, a spring wheat-producing area served byFarmers Union Grain Terminal Association.

These magazine covers from the 1960sdepict co-op activities, includinglivestock feed and fertilizer operations,Agriculture Secretary Orville Freemanopening the National Co-op Monthobservance at USDA; and MidlandCooperative’s prize-winning photo inthe annual Cooperative EditorialAssociation photo contest.


Twelve of these co-ops distribute anhy-drous ammonia while 14 handle 28- and32-percent nitrogen solution. Very littleaqua ammonia, low-pressure nitrogensolutions or liquid mixed fertilizers areused by their members. Eight associationsthat keep records show that anhydrousammonia represents 66 percent of thetotal fertilizer sales.

Co-op Grain Drying on the RiseThe trend toward early harvest in themid-1950s meant local elevators receivedmore grain with a high moisture content— more than they could convenientlyblend or sell at a discount. This trend hasgiven rise to grain drying services at the

elevators. A study by USDA’s FarmerCooperative Service and Kansas StateUniversity of 10 local elevators looks atdrying costs for a period of one year. Dur-ing the period, these elevators dried 3.25million bushels, or an average of 250,000bushels per dryer. Direct dryer costs aver-aged 1.47 cents per bushel of grain. Costswere lower when drying volume was high.

Purchasing Co-ops Cut FarmProduction CostsThe trend toward larger farms is prompt-ing a marked increase in services mem-bers expect from their cooperatives. Thisincludes bulk delivery of feed and petrole-um products, spreading fertilizer andgrinding feed by portable mills on thefarm. In turn, cooperatives are providingmore credit, transportation, fire insurance,electrical power and telephone services andrelated on-the-farm production or businessservice. As a result, regional cooperativesare increasing economic research on prob-lems of internal operations.

CCA Farm: A Testing and Proving GroundA 150-acre working farm owned by Con-sumer Cooperative Association at KansasCity, Mo., provides a testing center forfeeding and management practices, aswell as research labs. The beef, dairy,turkey, chicken and part of the hog breed-ing enterprises are patterned after a nor-mal Midwest farm operation. The threeobjectives of the farm are: 1) to determinespecific rates of gain per pound of CCAfeed under farm conditions; 2) to breedthe hog of tomorrow;and 3) to find anddemonstrate improved feeding and man-agement practices that can apply to indi-vidual livestock and poultry enterprises.Nearly 4,300 visitors toured the farm dur-ing the first year. The initial open houseafter CCA’s 1959 annual meeting attract-ed 750 people.

Cooperatives in the 1960s began offering consumerrecreation services -- such as rural golfing andfishing -- with the help of financing from the RuralElectrification Administration and technicalassistance from USDA’s Farmer Cooperative Service.

The Consumers Co-op Association at Eau Claire, Wis., opened a car care center featuring a lounge wherecustomers could watch television while waiting for their car to be serviced.

This mural provided inspiration for the MontgomeryFarm Women’s Co-op Market, Bethesda, Md., and itsmanager, Marjorie Hicks.


Snowstorm Doesn’t Impede Annual MeetingNot even a driving snow storm could pre-vent 16 of the 19 members of the SawyerCounty Mink Ranchers Cooperative atHayward, Wis., from attending the 1961annual meeting. Plans were approved toexpand the food plant to make the opera-tion more efficient. The initial plant wasfinanced by a loan from the St. Paul Bankfor Cooperatives. In its first month ofoperation, the cooperative showed a loss of$900, but by year-end it showed a netgain of $19,000. Savings for 1960 reached$33,000.

Secretary Freeman Sees NewHorizons for Co-opsCooperatives can make their greatest con-tribution only if they consciously seekever- widening horizons toward which toset their own goals, Secretary of Agricul-ture Orville Freeman tells the 1961 Amer-ican Institute of Cooperation.

Freeman says cooperatives should“make their voices heard effectively andconstructively in formulation and adop-tion of a national farm policy directedtoward achieving broad goals for Ameri-can agriculture.” He encourages “allfarmer cooperatives to cooperate with oneanother in the interest of a broad legisla-tive program for farmers, rather thanspeaking only from their specific com-modity interest with small and frag-mented voices.” He urges cooperatives tohelp improve public understanding of thecontributions and needs of the nation’sfarmers. He also urges cooperatives tostrengthen the bargaining power of farm-ers and explore benefits of vertical andhorizontal integration — especially inareas where modern science and technol-ogy offer advantages, such as in process-ing commodities.

Seminole Indian Cattlemen Form Co-opFor several years the cattle were ownedby the Seminole Indian tribe in Florida,but then cooperative principles wereadopted to improve marketing and pro-duction practices. The producers formedBig Cypress Indian Cattlemen’s Associa-tion, which is now a member of theGlades Livestock Marketing Association.Tribal herds had been dispersed and indi-vidual ownership has been achieved bymembers purchasing the cattle. It sold115 fat, full-range cows at its first sale in1961. The co-op has grown to 37 memberswho own about 1,500 head of high-gradeBrahman-cross cattle. They run regis-tered Angus bulls with their foundationherds.

Scrambling for Eggs the Co-op WayThe Inter-County Cooperative Associa-tion at Woodridge, N.Y., could build amountain with all the eggs it has handledin its 25 years. In 1936, its initial year,the cooperative had 41,470 hundred-weight in feed sales, which has grown to1.3 million hundredweight in 1960. In itsquarter century, the cooperative has allo-cated more than $1.5 million in patron-age refunds and paid out more than$376,000 in cash refunds. The pullet-financing program helps members withreplacement flocks. Financing bulk binsboosts bulk feed receipts on members’farms. It is the first organization in theEast to initiate an egg quality control pro-gram with federal-state grading serviceat the farm level.

Service Co-ops Raise Living StandardFarm service cooperatives and farmer-owned mutual service companies haveplayed an important part in the develop-ment of rural America in the 1960s. Theyprovided farm business services in elec-tricity, telephone, insurance, irrigation,

Co-ops in the 1960s became more adept atmarketing. National Grape Cooperative Associationused Fred Flintstone to promote Welch grapeproducts (top); Sunkist Growers opened its CitrusHouse at Disneyland (bottom), and June is DairyMonth (center) was heavily promoted.


credit and transportation to supportingcommercial farm operations. Mutual irri-gation companies, for instance, servedmore than 7,000 rural areas throughoutthe western third of the United States tobring water for crop irrigation on arid andsemi-arid soils and create prosperousfarms. In 1,600 or more rural areas in 40states, farmers’ mutual insurance com-panies are providing more than half ofthe fire insurance carried on farm prop-erty and save their 3.5 million membersat least $30 million in annual costs.

U.S. Co-op Marketing Movement Turns 50Cooperative marketing in the UnitedStates is marking its 50th anniversary in1963. The occasion is being observed inmany ways by cooperatives, coast to coast.

In Oregon, for example, the AppleGrowers Association is observing a dou-

ble celebration, since 1963 also marks its50th anniversary. The co-op was formedin 1913 when a bumper apple crop in Ore-gon’s Hood River valley prompted grow-ers who had been supporting four com-peting organizations to join forces in anew cooperative. In 1913, the Apple Grow-ers Association had 400 grower/memberswho controlled 65 percent of the area’sfruit. It secured a start-up loan of $5,000from a local bank.

By 1963, assets of the cooperative hadgrown to more than $8 million and itsmember equities stood at $4.2 million.The association today sells $11 million inproducts and purchases $1 million in sup-plies for its members annually. Its facili-ties include a 20,000-ton cannery, a 2-mil-lion-plus box cold storage warehouse andfive fruit packing houses.

It was 50 years ago, in 1913, that theU.S. Department of Agriculture estab-lished an Office of Markets to assist pro-

A Korean co-op signpost says that the association is“by, of, and for farmer-members.”

Lyman McKee, president of Milk Producers Co-op at Madison, Wis., and Dairy Society International, serveschocolate milk to visitors at the dairy mission at the World Trade Fair in Accra, Ghana.

President Lyndon Johnson was keynote speaker atthe 1967 Co-op Month observance.


ducers in marketing farm crops and pur-chasing farm supplies cooperatively. Itspurpose was to help cooperatives such asthe Apple Growers Association organizeon a sound basis and develop efficientoperating methods, work later carried outby USDA’s Farmer Cooperative Service.A 1913 survey by USDA showed that3,099 marketing cooperatives had a totalbusiness volume of more than $310 mil-lion, compared with 5,727 cooperativeswith an annual business volume of $9.6billion in farm products by 1960-61.

Despite the 50-year span, cooperativesare still having trouble securing adequatebargaining power. In 1913, the bestanswer was to establish a good local orregional commodity marketing coopera-tive. Fifty years later, the goal was tomerge or consolidate those cooperativesand enlarge the scope of their activities.

Seed Co-op Foraging for AnswersFarmers Forage Research Cooperative(FFR) organized in 1960 at Madison, Wis.,is unique in the cooperative businessworld because it combines two westerncooperatives that produce forage seed forresearch with eight Midwestern and east-ern cooperatives that will eventually dis-tribute improved seed varieties. FFR con-ducts basic and applied research indeveloping improved varieties of alfalfaand clovers and plans to add other cropslater. In 1962, FFR operated a combina-tion office, laboratory and large green-houses and tested 18,000 seedlings on its80 acres in Battle Ground, Ind.

NW Co-op Stabilizes Mink Feed SupplyContrast the wild mink plunging into theicy Yukon River for its daily fill of freshfish with their later day cousins in 1963,living on a fur farm and being served adaily ration of fish, grain, liver and vita-mins for a well-balanced meal by theNorthwest Fur Breeders cooperative(NFB) of Edmunds, Wash. Ranchersformed the cooperative in 1947 to stabi-lize the supply of fish feed for the expand-ing mink ranch industry.

NFB has become the second largestcooperative of its kind in the world and

A) A 1966 Christmas card from Farmers Union Central Exchange depicted children from Bombay, India,primary schools offering thanks for CARE product donations in an effort that helped feed 19,000 children.Employees and the co-op skipped holiday cards, parties and gifts for one another to finance the project.B) This circular cover was used for a 1966 article about the growth of farm supply cooperatives. C) Farmland Industries draped uncut press sheets for one of its publications near the member relations boothat its annual meeting. The intent was to stress the need for communicating with the membership. D & E) Cooperatives in the 1960s increasingly turned to computers to quicken handling of records andcalculations for members and management. North Central Wool Marketing Co-op at Minneapolis usedcomputers for storing fieldman records and dividend payments.A

B

CD

E


supplies fish and other foods for a half mil-lion minks in Washington, Idaho, Montanaand northwestern Oregon. The coopera-tive’s 190 mink rancher members ownmore than 70,000 female breeding minks.By the end of 1961, NFB had issued cer-tificates for retained margins and invest-ments worth $1.3 million and had retiredmore than $685,000 in stock, leaving only5 years of retained certificates to be retired.

St. Louis Co-op Bank Marks 30thIn marking its 30th anniversary, the St.Louis Bank for Cooperatives — the firstof the 12 district banks in the Farm Cred-it System — hosted 50 representativesfrom cooperatives in Illinois, Missouri andArkansas. D.M. Hardy, the bank’s firstand current president, was honored dur-ing the celebration. The bank loanedmembers more than $169 million, for agrand total of $1.4 billion in 30 years. Thebank returned more than $1.4 million instock to members as patronage refunds.

Transportation Service Achieves SavingsThe transportation bill for products mar-keted and supplies purchased by farmercooperatives is about $1 billion per year,

although only 2 percent of 5,000 cooper-atives use a full-time traffic or trans-portation manager. An estimated 33,000trucks are used as mobile warehousesthrough which members’ products andsupplies move. The FS Services’ truckfleet in Illinois, for instance, delivers70,000 loads of merchandise to its mem-ber cooperatives. Midwest grain coopera-tives own or lease 60 barges and hire hun-dreds of others to transport grain on theMississippi and Missouri rivers. Fourregional cooperatives ship 14.3 millionbushels of grain via barges for export.

Freeman, Voorhis Mark League’s 50th AnniversarySpeaking at the 50th anniversary con-gress of the Cooperative League of theUSA, Agriculture Secretary Orville Free-man pledges the partnership of USDAand the Farmer Cooperative Service inhelping cooperatives achieve even greaterusefulness. To solve the nation’s toughinternal problems and face growingresponsibilities and expanding opportu-nities, Freeman urges “better use of coop-eratives in new ways and to meet newneeds as we struggle to meet our nation-al objectives.” These objectives includeachieving income parity for the familyfarm, helping poor Americans lift them-selves out of poverty, and using the vol-untary self-help form of organization toopen up economic opportunities in cities.

In his final report after serving for 20years as the League’s executive, JerryVoorhis says cooperatives relate to fivegreat needs of the times: 1) they strength-en farmers’ position in the marketplace;2) they preserve the best in rural life andrevive rural communities; 3) they givepeople in cities a sense of belonging and oftaking part in worthwhile communityactivities; 4) they help the poor; 5) theyhelp solve the hunger crisis and help peo-ple learn to live together in peace.

He challenges the League to help

members find the vision and courage toadjust, expand, integrate and innovateservices. He says they must tell whatcooperatives are doing so they can growand develop rapidly and freely and shouldwork for cooperation among cooperativesof all kinds. They must continue to raisethe professional competence of all peoplein cooperatives: directors, managers,employees and members. “Growth is theprime necessity of the next 50 years incooperative development,” he says. Notsimply growth in size, but also growth invision and participation by members. Hesays co-ops must emphasize differencesand unique values.

Sioux Honey: Buzzing DistributionSioux Honey Association at Sioux City,Iowa, operates a “buzzing” distributionnetwork. In 1964, it moved more than 48million pounds of honey through that net-work to reach every part of the UnitedStates and many foreign markets. Thecooperative’s 1,100 members are scatteredover 32 states. Their crude honey ishauled by truck from 500 origin pointsinto six processing plants stretchingsweetly across 2,500 miles, from Way-cross, Ga., to Anaheim, Calif.

Large Breeding Co-ops ConsolidateMidwest Breeders Cooperative has beenformed through the combination of Con-solidated Breeders Cooperative of Anoka,Minn., and Badger Breeders Cooperativeof Shawano, Wis. Service and semen salesof the new organization, formed in 1967,will exceed $4 million. Now the nation’slargest breeders’ cooperative, it has 50,000members.

Calcot Recounts 40 Years of ProgressIn observing his cotton marketing coop-erative’s 40th anniversary, J. RussellKennedy, executive vice president of Cal-

Agriculture Secretary Orville Freeman (third from left)reviews a co-op month proclamation with PatrickHealy, National Milk Producers Federation; J.K.Stern,Cooperative League of the USA; and Torben Roane,Danish ambassador to the U.S.


cot, Ltd., of Bakersfield, Calif., stresses:“We have never lost sight of Calcot’s orig-inal objective of moving members’ cottonto market at the lowest cost, and obtain-ing for [them] full market value consis-tent with sound business practices, andmaintaining our superior reputation withthe textile industry.” The cooperative nowserves 4,000 members who deliver hun-dreds of thousands of bales each year toCalcot for sale around the globe.

At Age 50, WFA Just Getting StartedWestern Farmers Association (WFA) atSeattle, Wash., marked its 50th anniver-sary in 1967 but considers this only thebeginning of its efforts as an egg market-ing cooperative. It was started with only$245 in capital by 114 Washington poultryproducers; at that time it had no employ-ees or facilities. The first year was markedby $214,000 in egg sales and $203 patron-age earnings for members. Embarking onits second half century, WFA servesalmost 50,000 members and offersturkeys, canned and dehydrated poultryproducts, select frozen and canned veg-etables, grains, seeds, beans, eggs andfresh chickens. Its labeled productsappear across the nation and export mar-kets, with Alaska a prime market.

Dairymen’s League: 60 Years of ServiceDairymen’s League Cooperative Associa-tion of New York City is using a specialsupplement to its official membershipnewspaper to tell its six-decade history.The supplement also is appearing in fourNew York newspapers. The 15,000-mem-ber dairy co-op markets 3.9 billion poundsof milk and has net annual sales of $279million. It bargains successfully for high-er milk prices for dairymen supplyingmilk to New York City, the world’s largestmarket. It has established a pooling plan,created a system of classified pricing,

developed and promoted its trade namein the Northeast and has obtained U.S.Public Health Service approval for itsentire milk supply.

Statex on the MoveThere’s no standing still at its 50th birth-day for Farmers Union Central Exchangeof Omaha, better known by its Statexbrand name. It is using a new method ofcooperative financing — industrial devel-opment bonds, offered by the City of Fre-mont, Neb. — to raise $7 million to build

The board of directors of Bellamy (Ala.) Enterprises -- with organizational guidance from the FarmerCooperative Service -- took over American Can Company’s store and service station and added a credit unionfor its community members.

This tombstone marks the demise of oil lanterns infarm homes and barns. By 1962, 97 percent of thefarms were electrified, thanks in large measure toREA programs.


an anhydrous ammonia plant and dis-tribute its production. Joining the co-opin a new corporate structure that willoperate the FEL-TEX ammonia plant isFarmers Elevator Service Company (FEL-CO), of Ft. Dodge, Iowa.

Making Comeback the Cooperative WayHarness a new cooperative to a new gov-ernment loan source and you have the for-mula for small farmers in Mississippi tomake a comeback. Thirty farmers haveformed the Hinds Farm Service Associa-tion in Raymond and have obtained a loanfrom the Office of Economic Developmentwithin the Farmers Home Administration(FmHA). The loan will enable them tolease an equipment shed and to buymachinery to plant, cultivate and harvestsoybeans, cotton, and other crops. Mem-bership has tripled to 90, and the co-op isnow using 25 pieces of equipment. Thecooperative turned to Hinds County Co-opof Raymond, a member of Mississippi Fed-erated Cooperatives, to manage the ven-ture. During fiscal 1965, FmHA made 295loans to cooperatives totaling $1.3 million.

VP Humphrey Salutes New Agway Co-opAgway Inc., based in Syracuse, N.Y., hasbeen formed through the merger of Coop-erative GLF Exchange, Eastern StatesFarmers Exchange and PennsylvaniaFarm Bureau Cooperative Association. Inhis remark’s at Agway’s first annual meet-ing, Vice President Hubert Humphreycalls this cooperative the embodiment ofrural self-help ideals. “Cooperation is oneof the finest expressions of the Americanspirit,” Humphrey says. Here, groupsfaced with common needs invest theircapital and organize their own coopera-tive to met their needs. This is self-helpat its best,” he said. The observance ofNational Cooperative Month in October

“is an important reminder that coopera-tives are a vital part of our free enterprisesystem,” he says. Agway made $338 mil-lion in sales while serving 85,000 mem-bers during its first year of operation.

U.S. Grain to Japan: Co-op to Co-opBelieved to be the largest co-op to co-optrade agreement, Zenkoren, Japan’slargest agricultural cooperative, hasdocked a ship on George Washington’sbirthday at the export terminal of Pro-ducers Grain Corporation in CorpusChristi, Texas. It will load 35,000 tons ofmilo, the first installment of a 200,000-ton contract. This is the largest singleshipment of grain sorghum ever made byAmerican farmers.

Co-ops’ Answer to Urban, Rural Crisis“Co-ops are predicated on the belief thatordinary people can achieve extraordinaryfeats of accomplishment if only we informthem and ask them to take part,” Stan-ley Dreyer, new president of the Cooper-ative League of the USA, tells nearly 200representatives at its 28th biennial con-gress at Kansas City in 1969. He askshow cooperatives could be more relevantcurrently and in the future. In response,delegates examined how cooperatives canbe more responsive to the rural-urbanchallenge by helping to bring progress tolesser developed areas of the UnitedStates and abroad.

Southern States Features Profit SeminarsA new feature at Southern States Coop-erative’s 45th annual meeting at Rich-mond, Va., is profit seminars which exam-ine how the cooperative can help farmersmake more money from their farmingoperations. Delegates can attend two ofnine seminars. All relate to supplies andservices for livestock, crops, dairying and

other farming operations. One of the pop-ular sessions is on tires — farmers beingthe nation’s largest tire customers. South-ern States has brought together the besttechnical talent available from its 5-stateterritory and beyond.

Farmers Open Grain Export GatewayWith the dedication of Farmers ExportCompany near New Orleans in 1969, the1 million farmers represented by themember regional cooperatives havegained an export gateway. The new facil-ity encompasses a new, $20 million grainelevator and marine terminal on the Mis-sissippi River. To finance the facility, localcooperatives furnished $9 million and thebank for cooperatives extended $20 mil-lion. The first ship to dock there, theShahjehan Jayanti of Bombay, is loading800,000 bushels of corn, 300,000 bushelsof soybeans and 3,500 tons of gluten pel-lets for delivery to Rotterdam.

Major Milestones for Central FarmersA new potash ore strike at a potash minein central Canada and the opening of anew anhydrous ammonia pipeline aremajor market milestones in 1969 for Cen-tral Farmers Fertilizer Co., owned by 19major regional cooperatives. Strength-ened fertilizer services are now offered tothe 7,500 local cooperatives and their 3million members in the Midwest CornBelt. A series of terminals have been builtalong a 2,000-mile pipeline that carriesanhydrous ammonia from Central Farm-ers’ new 1,000-ton-a-day plant inLouisiana.

California Canners Opens in WisconsinIn its first venture outside its home state,California Canners and Growers (CCG)of San Francisco has opened its 10th andmost modern cannery, a $6.5 million plantat Lomira, Wis. The payroll is expected


to provide $750,000 annually to Wisconsinworkers. Formed in the 1950s by 473grower-members who put up about $1million in capital, CCG annually markets$115 million of canned foods in the Unit-ed States and to 29 foreign countries.

CCG doubled it sales in the past decadeand now has 1,200 members in Wisconsinand California. Sixty percent of its busi-ness is through private labels, institu-tional and remanufacture channels.

Record-Breaking Year for Almond Co-opThe 400 members attending the 57thannual meeting of the California AlmondGrowers Exchange are celebrating recordsales in 1968 of 63.3 million pounds ofalmonds in the domestic market and anear-record 22.4 million pounds in theexport market. The cooperative’s grossproceeds for the year topped $47 million.President Glenn Stalker reports that anew bulk receiving station in Chico, Calif.,has significantly reduced handling costsfor bulk boxes of almonds at its plant inSacramento.

STAPLCOTN Oldest Cotton Marketing Co-opStaple Cotton Cooperative Association atGreenwood, Miss., which turned 40 in1966, is the oldest cotton marketing coop-erative in continuous existence — evenpreceding the Cooperative Marketing Actof 1926 by five years. In its lifetime, the

cooperative has moved more than 15 mil-lion bales of cotton through its portals —enough to stretch half way around theworld. It has doubled its volume in thepast five years and developed an orderlymarketing approach to world markets forDelta cotton. It has also opened a com-press warehouse capable of storing 92,500bales and has established the STA-PLCOTN trademark.

Changes in 60s to Impact Co-ops in 70sChanges in agriculture in the 1960s willcontinue to affect cooperatives in the1970s. While the number of farms hasdecreased, the size of surviving farms hasincreased markedly. Both farm produc-tion expenses and cash receipts fromfarming have climbed. USDA’s FarmerCooperative Service has identified six sig-nificant cooperative developments duringthe 1960s: 1) the number of mergersincreased substantially; 2) processingoperations have increased; 3) greateremphasis is being placed on export trade;4) a larger range of services is beingoffered; 5) research efforts have beenstrengthened; 6) co-op educational pro-grams are stronger.

Regional Dairy Co-ops Grow Via ConsolidationsBy the late 1960s, a series of large region-al dairy cooperatives began to emergeresulting from continuing consolidations.

USDA’s Farmer Cooperative Servicereported that during the 1968-69 period,it recorded 84 mergers. These werebrought on by expanded technologicaldevelopment, greater competitive pres-sure, improved transportation and com-munication, and increased need for bet-ter management. Milk pickup routes fromdairy farmers were consolidated. Milkwas increasingly accepted in federal milkmarketing orders.

Mid-America Dairymen Inc., Spring-field, Mo., was formed in July, 1968through the merger of Sanitary Milk pro-ducers and Square Deal, both based in St.Louis, Mo., and Mid-America Milk Pro-ducers, Kansas City, Mo. Initial sales ofabout $200 million increased to $500 mil-lion in 1969 and the co-op marketed 3.5billion pounds of milk.

In Louisville, Ky., Dairymen Inc. wasformed by producers in 10 states with ananticipated volume of 3 billion pounds ofmilk. Associated Milk Producers Inc., Dal-las, Texas, had 25,000 members operat-ing in three regions (ranging from Wis-consin to Texas) who were producing 10billion pounds of milk. Meanwhile, LandO’Lakes Inc., at Minneapolis, had 100,000members and sales of $369 million at theend of the decade. ■


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

Michigan Adopts Bargaining LawThe new Michigan Agricultural Market-ing and Bargaining Act has drawn con-siderable attention because it is consid-ered the first comprehensive farmbargaining law enacted in the UnitedStates. It expires in 1976. Noel Stuckman,manager of the Michigan AgriculturalMarketing Association, reviews highlightsof the act at the association’s 12th annu-al meeting.

The law requires handlers to negotiatewith accredited associations which repre-sent all producers (members and non-members) in negotiations with handlers. Italso requires producers to pay marketingservice fees and establishes an Agricul-tural Marketing and Bargaining Board.The law also: sets association eligibilitystandards for accreditation; provides formediation and arbitration; details unlaw-ful practices by handlers and associations;and limits eligible commodities to perish-able fruits and vegetables.

Livestock Co-ops Vehicles forSoutheast ProgressBy group action through their livestockcooperatives, Southeast producers cangain sufficient bargaining strength in themarketplace to defend their prices andother terms of sale, according to a newreport by the National Commission onFood Marketing. “Livestock producers inmany areas have long used cooperativesto extend their influence beyond the far-mgate in marketing their animals, butthis has mostly occurred in the Midwest,where livestock production is concentrat-ed,” observes John Haas of the FarmerCooperative Service.

Noting the rapid growth in livestockproduction in the Southeast since WorldWar II, Haas says Southeast farmers sold20 million head of livestock worth $1.8billion in 1967, which represented a fifthof their total income. Haas concludes that

1970s

It was up with the new and down with the old as this service station in South St. Paul, Minn., installed its newCENEX sign in 1972 following a name change for the co-op. The same scene occurred throughout its 10-statetrade territory. And how about those gas prices?


producers have “failed to take advantageof the opportunities provided by a growingindustry to expand their influence in mar-keting livestock. The highly fragmentedcooperative market structure and lack ofcoordination between associations limittheir effectiveness in helping farmersimprove their bargaining strength.” Manysmaller associations need to consider con-solidating into larger units to broaden ser-vices and reduce cooperative overpopula-tion, he concludes.

Credit Report Accents Co-op GrowthAn advisory report of the Commission onAgricultural Credit, issued to the Feder-al Farm Credit Board, urges that a studybe undertaken which will gauge how theFarm Credit System might provide fur-ther assistance in financing developmentin rural America, including cooperativeutility systems, non-farm rural housingand rural community needs. The reporturges the Banks for Cooperatives, theprime credit source for agricultural coop-eratives, to seek liberalization of eligibil-ity requirements for borrowing associa-tions, broaden their loan purposes, andplace greater emphasis on promoting thegrowth and development of cooperatives.

Railroad Changes Impact Co-op Grain MarketingThe nation’s transportation system —truck, rail and barge — is dictating when,where and how grain will be marketed,according to a new study by USDA’sFarmer Cooperative Service. While trucksand barges are hauling increasing amountsof grain, railroads still remain the princi-pal haulers. So rail rates are the standardby which other charges are measured.

It was once common for a grain coop-erative to ship a single 50-ton railcar ofgrain to a single destination. But now, in1970, shipment in 5-, 20- or even 100-toncovered hopper railcars in unit trains is

routine. However, rate structures requireshipments larger than can be provided bythe average country elevator, which areoften located on branch rail lines. Manyof these rail branches are being aban-doned. Railroad management is empha-sizing large-volume, multiple-railcar ship-ments from a grain elevator or feed milllocated on a main line with the movementfitting into an existing train schedule.

Cache Co-op Trucks Brim with Swiss CheeseJust like alpine Switzerland, the CacheValley of northern Utah and southern Ida-ho brims with some of the world’s finestSwiss cheese, produced by Cache ValleyDairy Association at Amalga, Utah. Whenany of the co-op’s eight big vans ease awayfrom the loading dock and head for dis-tant western markets, they tote a cargovalued at nearly a quarter- million dol-lars. As the largest Swiss cheese plant inthe world, the co-op’s 200 employees pro-

Assuring farmers a supply of seed corn that was resistant to Southern Corn Leaf Blight required the servicesof nearly 1,000 teenagers to detassel seed-corn plants during 1971. They rode in buckets hanging from theextended arms mounted on a tractor moving through the field. The teenagers were hired by FS Services Inc.

Henry Von Bank, Minnesota Valley BreedersAssociation, places ampules of beef bull semenderived from the cooperative’s herd into cryogenicbottles prior to shipping them to one of thecooperative’s artificial insemination (AI) technicians.Cooperatives pioneered the AI industry.

duce 50,000 pounds of cheese from a dai-ly volume of a half million pounds of milk.Several hundred members are constantlybeing urged to increase milk productionfrom their herds to match the growingdemand for the co-op’s cheese. The valleyis home to 40,000 people and Utah StateUniversity. The cooperative is the mostimportant industry in the valley, with amonthly payroll of $90,000.

Severe Challenges Facing Co-ops in 1970sAgriculture is facing severe challenges inthe 1970s and cooperatives must helpguide these changes, not just react tothem, says Bill Black, agricultural econ-omist from Texas A&M University. “Coop-eratives have always generated agricul-tural leaders, and the future ofagriculture will depend upon leadershipfrom within,” he says.

Farmers will continue to be guided bythe economic laws of the marketplace, andthus must not be blinded by their emo-tional desire to produce without regard tomarket demands,” he says. Cooperativescan meet the challenges in seven ways: 1)providing marketing leadership; 2) enact-ing tougher production and quality poli-cies; 3) developing joint ventures; 4) devel-oping cash and contract markets; 5)pursuing new and expanded markets; 6)better research and development efforts;and 7) through strong internal leadership.

Detailed Records Help Boost Dairy ProductionCooperatives looking at ways to help theirmembers become better managers areincrerasingly turningd to computerizedbusiness and production records. Dairyfarmers with Dairy Herd ImprovementAssociations (DHIA) for herd manage-ment are producing an average of 3,000to 4,000 more pounds of milk per cowannually than those not using records.However, only 25 percent of the dairycows in the United States are on DHIAtesting. Agricultural Records Cooperativeat Madison, Wis., was developed primar-ily for processing dairy production andbusiness records.

Agri-Tech Analytics Inc., a subsidiaryof Dairymen’s Cooperative CreameryAssociation at Tulare, Calif., uses sophis-ticated techniques to improve herds andfarm management practices. Long Mead-ow Dairy Farms, a cooperative atDurham,. N. C., has joined with localcounty DHIAs to provide specializedrecord service to Long Meadow members.The cooperative pays a 10-cent bonus per100 pounds of Class I milk sold to thedairy plant from herds participating inthe DHIA or owner-sampler record plans.

Farmland Promotes Food as BargainFarmland Industries Inc., of Kansas City,Mo., has become a leading voice for agri-culture and those who face a myriad ofproblems in trying to make a respectableliving on the farm. The cooperative issponsoring a series of full-color newspa-per advertisements and a billboard nearits headquarters with the theme that“food is a bargain” compared with theprices of other products.

Ernest Lindsey, Farmland’s president,wants urban Americans to realize farm-ers aren’t getting rich and often are bare-ly surviving. He also discusses this dilem-ma in several articles appearing in


National Grape Cooperative Association’s subsidiary,Welch’s, introduced a new vitamin-enriched drink forthe Caribbean market during the early 1970s.

Children in downtown Hong Kong sip a beverageproduced by Sunkist Growers of California. Thecooperative anticipated sending 15 million cartons ofits citrus soft drink into the export market in 1972.


agricultural journals. The series of adsand articles triggers a flood of favorablereaction both from farmers and from oth-er cooperative organizations.

CRF Joint Venture Provides FeedConversion DataTwenty regional cooperatives, includingfour from Canada, have formed a jointventure — Cooperative Research Farms(CRF) — which involves a network ofeight livestock research farms that testfeed formulas to determine cost and con-version efficiency. Participating coopera-tives share in the costs and researchresults. The research program rests onlyon a gentlemen’s agreement outlined ina letter, which says the cooperatives willpay an annual assessment and abide bya majority decision in choice of projects.Total cost for the prject is about $500,000annually. Committees of feed specialistsfrom all participating cooperatives choosethe research projects.

Minnesota Co-op Multi-Serviced at 85There was little or no shock threshing inWatson, Minn., when Watson Farmers Ele-vator Co. was formed 85 years ago. Mostfarmers stacked their grain in round stacksin the field. It is believed to be the oldestcontinually operated grain cooperative inthe country. Farmers raised hogs and dairycattle, but the straw was considered use-less and burned in the field. There were notrucks, tractors, school busses, refrigera-tors, electric lights, gas or diesel motors —and no rural electric cooperatives.

Now 85 old, the cooperative offers amultitude of services plus grain market-ing. It has a feed plant for custom grind-ing and blending and a fertilizer ware-house and custom blending and spreadingservices. It cleans seeds, markets a vari-ety of grains, operates two grain dryersand has a storage capacity of 250,000bushels. Manager Roy Oleson, who is also

mayor of Watson, population 300, reportsthe co-op is handling 1.3 million bushelsof grain and has a total business of $1.6million. In the past year it had $31,640in net margins.

LOL, Sweet Cream Butter, Mark 50thLand O’Lakes (LOL), of Minneapolis,Minn., will mark a half century in busi-

Brynhilde Ringheim holds a pair of lobsters for a customer’s inspection in a retail store operated by Chatham(Mass.) Seafood Co-op Inc., on Cape Cod. It was the first seafood cooperative to receive a loan from the newSpringfield (Mass.) Bank for Cooperatives.

Connecticut farmer Louis Longo didn’t need thebackground cheerleader for his enthusiastic remarksat a dairy profit seminar sponsored by SouthernStates Cooperative at its 50th annual meeting inRichmond, Va.


ness during 1971. The dairy cooperativewas formed by 350 Minnesota dairy farm-ers as Minnesota Cooperative CreameriesAssociation, Unit No. 1. It was a statewidemarketing association that has gainedfame for its “sweet not sour cream butter.”It started with one borrowed desk, one bor-

rowed typewriter and a loan of $1,000. TheLOL brand name and Indian maiden logofirst appeared in 1924.

LOL’s current strategies, based ongoals set by its pioneers, include: to stan-dardize and improve quality throughcream grading and proper methods of

manufacture; to transport butter anddairy products by car-lot shipping; to pro-vide service in the sale of productsthrough closer cooperation with distribu-tion agencies and whole-market receivers;to cooperatively purchase supplies suchas salt, butter tubs, coal and the like incar-load lots, and to cooperatively adver-tise dairy products.

Leadership Co-op’s Greatest Contribution“I have often said that cooperatives havemade a great contribution to Americanagriculture,” Earl Butz, President Nixon’snew secretary of agriculture, tells delegatesto the National Council of Farmer Cooper-atives annual meeting. They supply a greatdeal of leadership to rural America, he says,because of the experience they’ve gainedin running cooperatives.

“This encourages participation in localgovernment and support for good gov-ernment and fiscal responsibility,” he con-tinues. This leadership has helped makeour country great and it is needed nowmore than ever as we move even furtherfrom a rural oriented society toward amore unsettled urban-oriented society.”

CENEX Trademark Is BornMarking its 41st annual meeting, Farm-ers Union Central Exchange formally

A Vermont co-op farmers market extended its fallseason a month and generated an extra $68,000 ingross receipts by selling handcrafts.

Long-grain, fresh-market cucumbers are washed, graded and packed by Tri County Farmers Association, avegetable marketing cooperative in eastern North Carolina.


adopts CENEX as the trademark, trade-name and general corporate communica-tion identification for this St. Paul, Minn.-based cooperative. The organization,however, retains its official corporatename. CENEX becomes the house-brandfor all products packaged and branded byCentral Exchange. It will also be used asthe corporate identifier in the market-place. The cooperative’s sales have justset a sales record of $200 million.

TCX Dedicates $1.7 Million Juice PlantKeeping pace with the state’s rapidly grow-ing citrus industry, Texas Citrus Exchange(TCX) at Edinburg has erected a $1.7-mil-lion frozen concentrate plant at Mission,Texas. Plant capacity is the largest in thestate, at 13,000 tons of concentrate per sea-son. TCX, formed in 1968, is a sales agencyfor five other cooperatives.

AMCOT Meets Cotton Marketing ChallengeBetter grower returns is the agriculturalchallenge of the 1970s, so four regionalcotton cooperatives — Calcot Ltd., of Bak-ersfield, Calif.; Plains Cotton CooperativeAssociation, Lubbock, Texas; Staple Cot-ton Cooperative Association, Greenwood,Miss.; and Southwest Irrigated GrowersAssociation, El Paso, Texas — haveformed AMCOT Inc. to link and strength-en worldwide marketing efforts. AMCOTstarted with 25 percent of the U.S. cottonproduction, or about 2.75 million bales ofcotton. With the additional muscle pro-vided by the merger, grower returns willimprove through broader market coordi-nation and through the economics of com-bined sales offices.

Hallberg Reemphasizes Co-op Education“There is a big challenge facing us inacquainting the many publics with the

role of cooperatives in our American com-petitive enterprise system,” Owen Hall-berg, the new president of the AmericanInstitute of Cooperation (AIC), says dur-ing the 45th National Institute in Coop-erative Education. “Constant examina-tion is vital,” he stresses.

Special emphasis on membership edu-cation should focus on young farmers andyouth, many of whom know very littleabout cooperatives. “We also need well-informed and concerned employees whounderstand what cooperatives are allabout, who are enthusiastic about theiremployer and can transmit this enthusi-asm to everyone they contact,” he says.

While more education may be possiblethrough better coordination among coop-erative organizations, government agen-cies, state councils and education groups,there are limitations, he says. The mainlimiting factors are: the”willingness ofdirectors and management to recognizeneeds; lack of courage by directors andmanagement to envision and plan long-range education programs; and the will-ingness to work together. We must be bigenough to recognize differences in philos-ophy and practice and be willing to over-look them in achieving our common goals.”

‘Food for Crude’ Policy Suggested by FS ServicesIn the midst of an international oil embar-go, exchanging food for crude oil makesgood sense, E.V. Stevenson, executive vicepresident for FS Services Inc., tells dele-gates attending the 1973 annual meetingof the Midwest-based farm supply cooper-ative. “We can produce more than enoughfood for the America people” and stillexport 50 percent of the soybean crop and20 percent of the corn, Stevenson says.Total farm exports are predicted to growto $20 billion by 1980, the same projectedvalue of oil imports by then, he notes.

“To produce for expanded exports, how-ever, we need adequate supplies of fuels

and fertilizer. We cannot feed our nationand part of the rest of the world if agri-culture is limited to a stick and a hoe anda fish in each hill of corn,” Stevenson says.“Making sure there is enough energy forfarming has a good payoff ratio. Farminguses less than 5 percent of the nation’s oiland 3 percent of the nation’s gas. But withthat vital percentage, we can produce theproducts to pay for 50 percent of the oilthe nation needs to import. So food forcrude makes sense.” And if that opportu-nity knocks, Stevenson says Midwestfarmers and their FS cooperative wouldbe willing and able to answer the call.

On a billboard near its Kansas City office, FarmlandIndustries advertised that “food is a bargain.”

St. Paul Federal Intermediate Credit Bank advertisedthat “farming is everybody’s bread and butter” onbumper stickers.


Southern State’s 50th: No Jack and Beanstalk TaleLike Jack and the Beanstalk, SouthernStates Cooperative at Richmond, Va., alsohas its roots in seeds, although in alfalfaand clover, rather than bean, seeds. Andinstead of a golden egg, co-op membershave reaped $91 million in cash refundsover the past half century.

Appropriately, the cooperative’s gold-en anniversary year has been its mostsuccessful.

Highlights include: volume is up 18percent, to $180 million; net savings aftertaxes total $5.1 million; fertilizer volumeis up 11.5 percent, to $30 million; petro-leum volume jumped 17 percent, to $22.7million; seed sales are up 31 percent, to$12.6 million; egg marketing climbed 10percent, to $4.9 million. As further icingon the cake, the co-op’s net worth hasreached $55.5 million.

Texas Sweet Tooth Begets $30 MillionThe nucleus for a Texas sugar canerevival has been created by 115 sugargrowers who formed Rio Grande ValleySugar Growers Inc. They built a $30 mil-lion processing plant near Santa Rosa.Chartered in 1970, the co-op planted 25acres of cane as seed crop, added anoth-er 250 acres in 1971, then expanded to2,500 acres for seed by 1972. By late 1973,they had 25,400 production acres of caneto grind into raw sugar. The cooperativehas signed a contract to supply the onlyrefinery in Texas.

Agri-Trans: Birth of Co-op NavyCF Industries President R.R. Baxter saysfertilizer barge shipments are expected toincrease five-fold during the next fiveyears, so a barge-shipping cooperative isessential to long-range plans for improvingservice to member-owners and to reduceshipping costs. Agri-Trans Corporation isDairymen Inc., of Louisville, Ky., used its annual report to double as a calendar.


an interregional transportation coopera-tive formed by six cooperatives to do justthat. It ships nitrogen and phosphate fer-tilizer from CF Industries plants in Flori-da and Louisiana to the Upper Midwest.The ships return with members’ grain,destined for Gulf Coast export facilities.

Grain cooperatives face similar trans-portation pressures, so it was natural forthem to join CF Industries in formingAgri-Trans. Other initial owners includeFarmer Grain Dealers Association ofIowa, Farmers Union Grain TerminalAssociation, Illinois Grain Corporation,Missouri Farmers Association andSt.Louis Grain Corporation. CF will man-age the firm, which gained its impetusfrom a study by the USDA Farmer Coop-erative Service. The study explored theadvantages of coordinating north-southflows of grain and bulk fertilizer.

REA an Electrifying ExperienceWhen USDA’s Rural ElectrificationAdministration (REA) was formed in 1935to provide loans to finance farm electri-cal service, only 1 in every 10 farms hadelectrical service. How successful was thiseffort? Just 40 years later, 99 percent offarms have electrical service. There aremore than 1,000 REA-financed rural elec-tric systems serving rural America,including 977 cooperatives. Lines havebeen strung from above the Arctic Circlein Alaska to the Florida Keys and fromMaine to the California desert.

CCC Program Opened to Co-opsCooperative associations marketing grain— including barley, corn, oats, rye,sorghum and wheat — gained access toprograms of the Commodity Credit Cor-poration (CCC) in 1977 on behalf of theirmembers. They had earlier been approvedto receive CCC loans on cotton, honey, riceand soybeans. Expansion of the programto feed grain and wheat growers gave

them the option of not taking a loan, tak-ing a loan as an individual producer, ordelivering grain to their CCC-approvedcooperative for marketing. Marketingcooperatives handling these commoditieswere eligible to participate regardless oftheir size.

Minnesota Co-ops Buy Volstead HomeMembers of the Minnesota Association ofCooperatives (MAC) are joining commu-nity leaders to purchase the home of thelate Congressman Andrew Volstead atGranite Falls, Minn. They plan to turn itinto a museum as a tribute to his impacton the cooperative movement. The will bedonated to the city. As chairman of theHouse Judiciary Committee, Volsteadauthored what is now known as the Cap-per-Volstead Act of 1922, which enabledfarmers to jointly market their productswithout being prosecuted for antitrust vio-lations. Museum preparations wereexpected to take two years.

Cooperatives Ponder Bargaining LegislationConcerns over shortcomings in the 1967Agricultural Unfair Practices Act promptdiscussions among managers of fruit andvegetable bargaining associations andlegal experts about elements needed innew legislation. The act prohibited dis-crimination by a processor against a pro-ducer because of his membership in a bar-gaining cooperative or against thecooperative itself. The scope of the act wasconsidered limited and enforcementmachinery inadequate.

Elements of the Michigan AgriculturalMarketing and Bargaining Act of 1973are being studied. It, like the Sisk Bill lat-er introduced in Congress, provided thataccredited associations represent all pro-ducers (members and non-members) inthe bargaining unit; all producers in theunit must pay marketing service fees to

an accredited association; mediation isoptional, but arbitration is compulsoryunless, within a given time, the proces-sor elects not to purchase or the associa-tion decides not the sell the commodity tothe processor. Both the bargaining coop-eratives and processors were required tobargain in good faith.

Torgerson Heads USDA’s FCSDr. Randall Torgerson, a staff economistfor the administrator of the AgriculturalMarketing Service, has been named byAgriculture Secretary Earl Butz as admin-istrator of Farmer Cooperative Service. Hesucceeds Dr. Ronald Knutson, who joinedthe faculty of Texas A & M University.Torgerson, a native of Wisconsin, directsthe FCS research and technical assistanceefforts of 60 agricultural economists andcooperative specialists. While teaching atthe University of Missouri-Columbia, hewas executive secretary of the MissouriInstitute of Cooperatives and executivesecretary of the university’s GraduateInstitute of Cooperative Leadership.

Marketing Act Celebration Salutes Programs of FCSThe 1975 observance was dubbed a birth-day party because it marked the 50th

Indiana Farm Bureau Cooperative Associationmarked its 50th anniversary and record sales of$700 million by feeding an estimated 13,300 peoplein a 4.5-acre dining room.


anniversary for the Cooperative Market-ing Act of 1926. That legislation led to cre-ation of USDA’s Farmer Cooperative Ser-vice (FCS). Secretary of Agriculture EarlButz says one of the greatest challenges ofthe cooperative movement is to focus onmembers’ interests. “I think there is no bet-ter training ground for democracy in thiscountry than in the self-management andoperation of these cooperatives. That to mehas been the great contribution that coop-eratives have made in the past 50 yearsand I think it will be the greatest contri-bution they will make in the next 50 years.”

Patrick Healy, secretary of the Nation-al Milk Producers Federation, calls FCS“A much needed voice within government,deeply appreciated by farmers. Its knowl-edge of cooperative activity is invaluablein setting the record straight and in coun-tering relentless attacks on coopera-tives...” Ken Naden, president of theNational Council of Farmer Cooperatives,cites FCS for its business analysis workwith cooperatives. He says no other gov-ernment agency collects statistics andanalyzed the books and the method capi-talization and distribution of earnings ofcooperatives. Dr. Randall Torgerson, FCSadministrator, adds that while the agencyis Washington-based, it stays close to theoperating problems at the grass roots.Three predecessor FCS administratorsjoin the celebration: Dr. Joseph Knapp,1953-66; Dr. David Angeline, 1966-70, andDr. Ronald Knutson, 1973-75.

Grain Co-ops Expand Storage, ProcessingRegional and interregional grain mar-keting cooperatives are significantlyexpanding their storage and processingcapacity. By 1976, nearly 60 percent oftheir grain marketings — or 1.6 millionbushels — are headed for the export mar-ket. Storage capacity of 18 major graincooperatives totals 400 million bushels,more than half at inland locations, 50 mil-

lion bushels on navigable rivers or theGreat Lakes, and nearly 60 millionbushels at sea ports.

Other improvements include new dustand pollution control equipment and newequipment to increase capacity to receive,condition and load grain — particularlyat port terminals at Ama, La., Houston,Texas and Baltimore, Md. Hopper carusage for grain shipments to ports hasalso greatly expanded, as has the use oftank cars for shipping vegetable oil. Muchof the grain shipped by regional is goingby barge to port elevators near NewOrleans and Portland.

Five Midwest regional grain coopera-tives have now joined CF Industries, theinterregional cooperative that manufac-tures and distributes fertilizer, to formAgri-Trans Corp., based near St. Louis.The firm uses seven towboats and near-ly 200 barges to ship grain down the Mis-sissippi River to New Orleans and returnwith fertilizer materials destined for Mid-west regional cooperatives.

Riceland CEO Retires in Co-op’s Record YearAs a swan song to the 1977 retirement ofL.C. Carter, the co-op’s president and chiefexecutive officer, Riceland Foods atStuttgart, Ark., handles a record volumeof rice just as it was completing a majorbuildup of its rice division — increasingmilling capacity by a third, doubling par-boiling capacity, and adding about 15 mil-lion bushels of storage. Marking its 57thyear of operations, Riceland’s gross salesreached $488 million. Returns to membersfor grain handled topped the preliminarynational average price by $33.9 million.

Farm Credit System Loans $38 BillionFarmers and their cooperatives receivedloans totaling $38 billion in 1977 from theFarm Credit System, an increase of 11percent from 1976. Gov. Don Wilkinson of

the Farm Credit Administration report-ed a record $42 billion of loans outstand-ing. Banks for Cooperatives loans wereup 9.2 percent to $11.8 billion.

Agway Boosts Energy SavingsIn an effort to encourage its member coop-eratives to conserve energy, Agway Inc.of Syracuse, N.Y., has published a 40-pagehandbook outlining energy managementsteps and planning tips. The potentials-for savings included many projects thatrequire little or no investment. Topicareas included tractors, insulation, house-hold appliances and tillage management.

School Class Functions as Co-opNearly 20 cooperatives have come andgone during the past five years at Rich-land Center, Wis. But financial troublehas not been the cause of their demise.All lasted only nine weeks because theywere part of a seventh grade study onAmerican industry at Richland MiddleSchool. The project took place in an indus-trial arts class taught by Jerry Sims. Itcombined traditional shop skills withlessons on history, practices and problemsof industry.

Students studied the four kinds ofindustrial ownership, including coopera-tives. They formed a cooperative, bought ashare of stock, planned, manufactured andmarketed their shop projects: foot stools,plastic bowls, billfolds, coin holders, pic-ture frames and stationery. Finally, theydissolved the cooperative and redeemedstock. Community support for the schoolcooperatives has been excellent.

“That’s really why I went with a coop-erative approach,” Sims says. “The area’s[cooperative orientation] dictates it.” Hehad little knowledge or experience withcooperatives so he got information fromthe Wisconsin Federation of Cooperatives.“A lot came from local cooperative man-agers. They were fantastic.” Sims says he


is “pretty satisfied” with the program. Itopens the students’ eyes. ...One of thebiggest problems cooperatives have iseducation of youth, and this really showsstudents what cooperatives are.”

Holsum Foods: Farmer to Consumer LinkMember-produced products are movingthrough the marketing chain from farmto supermarket shelf for the first time,B.J. Malusky, president of Grain Termi-nal Association at St. Paul, tells partici-pants at the grain marketing cooperative’s39th annual meeting. He is speaking ofthe earlier purchase of Holsum Foods atWaukesha, Wis. It was folded into GTA’sHoneymead Division, a packer and proces-sor of foods for the dinner table. The firmsells in 22 states through 40 brokers. Dur-ing the past fiscal year, GTA handled 256million bushels of grain and showed after-tax margins of $7 million. Now, beginningwith its 40th year, GTA will increase itscash patronage refunds from the required20 percent to 30 percent.

Citrus Growers, Auto Maker CooperateSeald-Sweet Growers of Florida and theJapanese Toyota automaker have com-pleted a historic trading action. When theautomaker delivered its cargo to Jack-sonville, Fla., aboard a new $28 millionvessel — the world’s first combination carand refrigerated cargo carrier — it

returned to Tokyo with 283,000 cartons offresh Florida grapefruit and oranges. Theshipment of 14 million individual fruitswas the largest in the state’s history.

LOL Moves Into Beef ProcessingA major dairy marketing cooperative hasmoved closer to becoming a total foodcompany. Land O’Lakes (LOL) of Min-neapolis has entered the red meat busi-ness by buying Spencer (Iowa) Foods in1978. LOL soon adds the processing plantat Oakland, Iowa, owned by AmericanBeef Packers, to boost the cooperative’sannual processing capacity to nearly 1.5million head. President Ralph Hofsteadsays the purchases were made only afterefforts failed to organize a “CF Industries”approach with other regionals.

Co-op Use of Subsidiaries GainsFarmer cooperatives are increasinglyusing subsidiaries instead of divisions ordepartments to conduct some services. Of80 large regionals reviewed, 58 had oneor more subsidiaries in 1975-76. Eightcooperatives alone listed use of 195 sub-sidiaries.

Co-ops Facing Key Capital, Structure IssuesCapital formation, the structure of coop-erative growth, expanding product mar-kets and communications are key issuesfor cooperative leaders in the 1980s, says

Randall Torgerson, deputy administratorof USDA’s Economic, Statistical and Coop-erative Service. “National issues such asadapting to an energy-short environment,wrestling with rural transportation prob-lems, pricing commodities in thin mar-kets and dealing with complex govern-ment regulations will continue, he says.“The decade can well become cooperative’sgreatest growth period because of farmerand rancher awareness of the importantstructural role cooperatives play in main-taining access to markets for a dispersedagriculture. Primary ares of growth willbe in exporting grain and oilseeds andestablishing cooperatives in red meat pro-cessing and distribution. ■

48 November/December 1998 / Rural Cooperatives The 1980s

Mergers, Consolidations Change Look of U.S. Cooperatives

Mergers Hit Major RegionalsFinancial conditions during the 1980s arefueling a string of mergers among themajor regional cooperatives. The newGROWMARK Inc. Cooperative, formedthrough the merger of FS Services andIllinois Grain cooperative, is now led by

Glenn Webb, who had been vice president ofthe board. The cooperative’s net margins in1980 were $43.8 million on sales of nearly$1.5 billion. GROWMARK owns six grainterminals on the Illinois River, an inlandterminal at Paxton, Ill., and an interest inFarmers Export Co., an interregional coop-erative based near New Orleans.

In the Minneapolis- St. Paul area, Mid-land Cooperatives has merged with LandO’Lakes Inc. (LOL) to form the secondlargest cooperative in the nation. Mid-land’s 1980 sales were $523.5 million,while LOL had $3.3 billion in sales. LOLPresident Ralph Hofstad says the neworganizations could save nearly $7 mil-lion in administrative and operating costs.The bankrupt status of Energy Coopera-tive Inc., one of three interregionals inwhich the two Minnesota cooperativeshad common membership, was a factor inthe merger.

In another major co-op unification,Farmers Union Central Exchange(CENEX) has purchased the assets ofWestern Farmers Association (WFA) ofSeattle, Wash., and consolidated the oper-ations of Idah-Best, based in Caldwell,Idaho. CENEX is now an Idaho feed sup-plier. WFA had been under federal bank-ruptcy act reorganization for two years.Its member cooperatives were eventual-ly purchased by CENEX members.

California’s Tri Valley Growers hasassumed responsibility for the bankruptCalifornia Canners and Growers’ (CCG)marketing inventories, leasing four facil-ities and adding 300 CCA growers.William Allewelt, Jr., Tri Valley president,says he is looking forward to an improvedmarketing picture, thanks in part toadverse weather that helped eliminate thecanned fruit surplus that plagued mar-kets in the past three years. Tri Valleysought to avoid liquidation of CCG’s inven-tory and to provide market outlets forgrowers left without a home for their crop.

1980s

Members of Southern States Cooperative gather at one of 10 outlying locations to view a satellite-transmittedannual meeting program from its headquarters at Richmond, Va. Producers were able to quiz a managementpanel about aspects of the cooperative's activities.

This artwork illustated the trend toward more farmmergers.

The 1980s Rural Cooperatives / November/December 1998 49

Members of both Ohio Farmers Grainand Supply and Landmark Inc., haveapproved unification of their regional co-ops to form Countrymark Inc., with salesof nearly $1 billion and assets exceeding$240 million. The action had no effect onthe corporate status of the new coopera-tive’s 136 locally owned and controlledmember cooperatives in Ohio, Michiganand Indiana. Don Benschneider, formerLandmark chairman, headed the newCountrymark board.

Vertical Integration Key to MoroniMoroni Feed Co. of Canpete County,Utah, is one of the few fully integratedturkey producing and marketing cooper-atives in the United States. It has aturkey breeding farm, hatchery and feedmill plus a processing, packaging andfreezing plant, fertilizer department anda disease diagnostic laboratory. Growershave maintained a profitable cooperativeeven though they are located between themountains in the desert, which causeshigher production costs, higher freightcosts and lower turkey prices than com-petitors in most parts of the country.Turkeys are marketed through NorbestInc., another Utah cooperative.

Poultry Producers Seek Collective BargainingIn response to many years of being caughtin the “vice” between an increasingly con-centrated processing industry and risingproduction costs, broiler producers on theMid-Atlantic’s Delmarva peninsula haveformed the Peninsula Poultry GrowersAssociation (PPGA). Producers expectedPPGA to enable them to collectively bar-gain with the processors. The number ofprocessors in the region declined frommore than 100 in the 1930s to the current10. Nationwide, 20 of the 60 processorsproduce 60 percent of all dressed poultry.

‘Those Who Show Up’ Control Co-opA Wisconsin dairy farmer and president ofConsolidated Badger Cooperative tells del-egates at the co-op’s annual meeting thatthe world and all organizations are run bythose who are interested and committed— or “by those who show up. Our businessof producing and marketing milk is verycompetitive,” says John Malcheski. Despiteour efficiency, that will not guarantee usa fair share of the income we need to keepus free and in control of our destiny. Thiscan only be done when we, as farmers,involve ourselves beyond our farms. As welook to the future, needed changes will bemade by those who show up.”

California Fruit, Nut Co-ops Form Sun-DiamondThree California cooperatives have formeda common marketing cooperative: Sun-Diamond Growers. Members are DiamondWalnut Growers, Sun-Maid Growers(raisins) and Sunsweet Growers (prunes).The marketing agreement is expected toimprove grower members’ crop returnsthrough savings and efficiency in sellinga diversified line of dried fruits and nuts.“Challenges from giant conglomeratesentering the food processing field placesstresses on the limited resources of ourfarmer enterprises,” says William Dabney,Sun-Diamond’s president.

Co-op Development Training Center OpensNineteen students are participating in thefirst, one-week classes opening the Nation-al Cooperative Development Training Cen-ter at the University of Georgia in Athensin 1981. The center is an adjunct to thecooperative development division inUSDA’s Agricultural Cooperative Ser-vice(ACS). The ACS program assists newcooperative directors and managers todevelop successful businesses.

Farmers Export Revamps After LossesSuffering from financial losses estimatedat $40.9 million in 1981, Farmers ExportCo., the export marketing arm of Midwestregional grain cooperatives, has reorga-nized. It has sold the Galveston elevatorto Far-Mar-Co, sold lease holdings inPhiladelphia, lost six of its 12 membercooperatives, scaled down its headquar-ters staff and closed offices in Portland,Ore. and Tokyo.

Reluctance to Unite a Major Flaw“We aren’t as big as the major corporationswith whom we must compete, but if wedon’t grow, we can’t provide the benefitsour members expect,” says Sigved Samp-son, recently retired president of MidlandCooperatives, headquartered in Min-neapolis-St. Paul. Based on his 41 yearswith Midland, he contends that a majorflaw of cooperatives is their reluctance tounite to find solutions to their problems.He urges haste in unifying the nation’s too-fragmented network of cooperatives.

Sampson also is concerned about trans-

Cover art from “The Next Greatest Thing,” a photohistory book produced to mark the 50th anniversaryof U.S. rural electric cooperatives. Here, the joyousday arrives when a High Plains farm family is"hooked up" with electric power.


ferring ownership of a cooperative from onegeneration to another. “No farm supplycooperative in the country has fully resolvedit. And as co-ops become larger and morecapital intensive, and farmers become few-er in number but larger in size, this own-ership transfer problem will become moreacute, burdensome and complicated. We’vegot to figure out how to transfer ownershipfrom the generation that is retiring to theone now using the co-op.”

Knutson: “Commit to Co-ops or Loose Control”Young farmers have only two choicestoday. Join the corporate structure and“relinquish all control,” or commit to thecooperative system, cautions RonaldKnutson, professor of marketing and pol-icy at Texas A & M University. Take anactivist role in cooperatives or neither ofyou will survive the 1980s, he told 228young farmers from across the nation whoare attending the 1982 National Instituteon Cooperative Education.

Also addressing the institute, KenBaer, chief executive officer of GROW-MARK Inc., at Bloomington, Ill., says thetime has come to deal with the realitythat farmers account for only 3 percentof the population and many of their coop-eratives have fallen on hard times. “Aftermany years of financial growth throughthe use of debt, farmers may face the needto write some checks and infuse addedequity to preserve their cooperatives.”

Consumer Co-op Bank GainsIndependenceThe National Consumer CooperativeBank of Washington, D.C., has been pri-vatized by new legislation passed by Con-gress and approved by the president. Gov-ernment equity has been converted to a

loan to the bank and ownership turnedover to members. Directors, elected bymember cooperatives, have replaced gov-ernment-appointed board members. Thepresident will continue to appoint a smallbusiness representative and two otherdirectors to the 15-member board.

Gold Kist’s Gaston Boosts Co-op Exports“There may be no tomorrow for co-ops inexports unless we pull together,” warnsWilliam Gaston, president of Gold KistInc., Atlanta, Ga. Speaking during theinternational development program at the1983 National Institute on CooperativeEducation, Gaston says, “Make no mis-take, cooperatives have lost ground inrecent years, if not in volume, certainlyin prestige.”

Speaking also as chairman of ToepferInternational, a North American andEuropean cooperative-owned trading com-pany, Gaston urges other commodity coop-eratives to join Toepfer and expand theirmarketing programs via exports. “If wemake up our minds today that we are allgoing to do something to improve ourinternational trade efforts, we can makeit happen. Our cooperatives will bestronger for it, and so will our patrons.”

Involve Young Farmers in Co-op ActivitiesEducating young farmers and young farmcouples on cooperative principles andpractices is vital to bolster their support ofcooperatives, a University of Georgiastudy shows. An educational programshould emphasize two-way communica-tion between cooperative officers andyoung farmer-members and needs to bedeveloped at the grassroots level.

A tank lid seems to float over one of three, 700,000-gallon grape juice storage tanks being constructed forWelch Foods in Pennsylvania prior to the 1983 season.

This dove was used to symbolize the Food for Peaceprogram using PL 480 funds to foster humanitarianaid and developing long-term export markets.


Block Vows to Protect Co-opsAgriculture Secretary John Block sayscooperatives are so important to Ameri-can agriculture that the USDA will workto protect them by “assuming a strong pol-icy making role concerning any govern-ment legislation or regulations” affectingthem. Speaking at the 1981 annual meet-ing of the Cooperative League of the USA,Block says there are those who wouldattempt to “weaken” cooperatives. “But Ipledge to you ... that we will not allowthem to be weakened. I will work to sup-port them.”

To fortify agriculture, “it is imperativewe work to maintain and strengthen thefinancial base of our nation’s agriculturalcooperatives,” Block says. He encouragesfarm and consumer cooperatives to worktogether to strengthen the free market.While farming in Illinois, Block was anactive patron and director of his localSpoon River FS cooperative.

Minnesota Co-op Stretches Corn ValueMinnesota Corn Processors (MCP) hasopened a $40 million corn wet millingplant at Marshall that derived syrup,starch and feed byproducts from corn. St.Paul Farm Credit Banks were the majorlenders for the project. In later years,many will point to this co-op as showingthe way for a surge of new cooperativesformed to add value to members’ farmcommodities.

President Richard Jurgenson notesthat “for too long, we’ve depended upongovernment programs or some other out-side help to keep us solvent. Having theopportunity to generate a better netreturn from each bushel of corn withoutgovernment help just makes sense tome.” In the initial equity drive, herecalls, the first $1.5 million was com-mitted by producers in only three days.But the rest of the needed investmentsdidn’t come so easy. “We hit stonewalls

often — but refused to quit.” Nearly2,100 producers for 18 counties initial-ly agreed to a 5,000-bushel membershipcontract (at $21.41 per bushel). Theplant handles about 11 million bushelsannually, translating to 350 millionpounds of products.

Bergland: “Commitment MeansStaying Power”“Commitment means staying power,” saysBob Bergland, president of the NationalRural Electric Cooperative Association andkeynote speaker at the 1984 National Insti-

Farmland Industries used its Co-op Video Network studio to prepare videotapes for use at farmer meetings.


tute on Cooperative Education. “We haveit. We have strong, bright and dedicatedyoung people. It’s just a matter of putting itall together. What you do with the poweris up to you. The choice is yours.”

He urges more cooperative involve-ment in the international scene. “Youcan’t walk away from it. There is atremendous opportunity for cooperativesto help developing countries get on theirfeet so they can pay their own way.” Inrecalling his father’s involvement in orga-nizing Minnesota cooperatives, Bergland

points to the need for change among exist-ing organizations. Many small co-ops needto expand, merge or consolidate, he says.

Cooperation Restores Rail Line ServiceWhen Illinois Central Gulf Railroadimposed a 70-ton-per-car limit on a 63-mile branch line in 1977, it effectivelyblocked use of efficient 100-ton hopper.That sparked six shippers on the line,including four member cooperatives, to

form the Bloomer Line Connecting Rail-way Co., which bought and operates therail line. Robert Graves, director of trafficfor FS Services (now GROWMARK) — towhich the four co-ops belonged —advanced the case before the InterstateCommerce Commission.

A 32-mile rail line was opened for oper-ation and interconnection with the NorfolkSouthern Railroad in 1985, after extensiverefurbishing. Federal and state fundingsources were used in this effort. Furtherwork that year opened an interconnectionwith the Santa Fe Railroad, followed byfurther refurbishing on the northern linkand an interconnection with Illinois Cen-tral Gulf. About 90 percent of the annualloadings — including grain, fertilizer andmiscellaneous products, such lumber —are expected to come from the cooperatives.

“We couldn’t possibly have accom-plished this and at the price we did if start-ing today,” says Leo Smith, line chairmanand manager of Anchor Grain. He creditsthe success of the effort to lucky timing inprotesting the service disruption and “thecooperative spirit among our members,which has made it possible to achieve ourcommon goal: restoring rail service.”

Andreas: Use Trade, Food Aid to Douse Prairie FireA tougher trade policy and a substantialincrease in the Food for Peace (PL 480)Program can help “end the depressionsweeping like a prairie fire across thenation’s heartland,” says DwayneAndreas, chairman of Archer Daniels Mid-land, Decatur, Ill. Addressing the 1986annual meeting of the National Councilof Farmer Cooperatives, Andreas says theU.S. government must convince “mercan-tile governments” that their policies ofdumping surplus agricultural products inworld markets at below-cost prices “arenot always in anyone’s best interests.”

Despite budget pressures, the govern-ment should double the $2.5 billion

A towboat steers a fertilizer-laden barge toward dock at a Midwest storage warehouse owned by CF Industries,an inter-regional manufacturing and distributing cooperative.


planned for the PL 480 program for thenext five years, he says, because it wouldsave $4.5 billion in price support expen-ditures and expand farm export markets.It will also “add jobs for workers in pro-cessing, trucking, shipping and relatedindustries.” That, in turn, would generate$300 million in new tax revenue, he says.

Pressure Seen to Merge, Consolidate Co-opsGiven the restructuring in agricultureand agribusiness, cooperatives must seri-ously consider merger or consolidation,Don Sands, president of Gold Kist Inc.says in keynote remarks at the 1986 East-ern Member Relations Conference. Hesays restructuring “will bring about morechanges in the next three to five yearsthan we have seen in the past 20. Changenot only can be challenging, exciting andrewarding, but also frightening, extreme-ly stressful and even depressing.”

Sands tells the conferees: “Consolida-tion or merger should be pursued in mostparts of the United States. There is nojustification for the intricate web of morethan 5,000 farmer cooperatives existingtoday...History tells us co-ops merge onlywhen participants are on their death bed.Rather than merge small, sick companiesto create one large, sick cooperative, whynot explore consolidation where all part-ners are relatively strong?

Mergers and consolidations in theFarm Credit System were discussed forfive years, he says, “but nothing happeneduntil the entire system nearly collapsedunder the greatest losses in bankingindustry history. I don’t think members’interests were being served,” he says. “Itwill be many years before the systemregains its strength.” As an indication ofimpending changes, he cites a Congres-sional Office of Technology study that saysby the year 2000, animal and plant pro-duction will be revolutionized by biotechand infotech.

FCS Losses Down, Still HeavyAlthough combined results for the FarmCredit System (FCS) in fiscal 1986 showeda net loss of $1.913 billion, the crisisshowed some easing compared with 1985

losses of $2.689 billion. New loans are alsodown from $66.6 billion to $54.6 billion.Other property, primarily from foreclo-sures, has increased to $1.101 billion, upfrom $928 million. The system’s total cap-ital dropped $2.7 billion, to $5.6 billion.

A bountiful fall corn crop is harvested near Aurora, Neb., against the backdrop of a CF Industries anhydrousammonia storage terminal.

The USDA Agricultural Cooperative Service booth attracts attention at the 1987 National Institute onCooperative Education.


Acceptance of Co-op Business GrowingThe future for cooperative activity inboth domestic and international arenasis strong and growing, says RobertScherer, new president of the NationalCooperative Business Association(NCBA), in his first report to the mem-bership. Given the new emphasis on coop-erative business, Scherer says NCBAmust be prepared to network with theentire business community. “We are proudto be called cooperatives. They are beingformed by businesses long thought of asbeing anti-cooperative....We should beproud of that trend.”

Torgerson Sees Return to Early Co-op Zeal“Despite being in the most economicallydisruptive period in a half century, familyfarmers and their cooperatives remain amajor force in agriculture (and) ... are posi-tioned well to exploit their future in theyears ahead,” observes Randall Torgerson,administrator for USDA’s AgriculturalCooperative Service, in remarks to the 1987Eastern Member Relations Conference.

He urges the conferees to “take a hardlook at cooperative education and train-ing programs in view of the aloof anddoubtful attitude of many young farmcouples toward cooperatives. “We need toreemphasize public and private roles ofteaching about cooperatives as uniqueinstitutions and the responsibilities of allparticipants, including chief executive offi-cers, staff, directors and members.”

Torgerson called for a “return to theearly zeal that led to the formation of coop-eratives. “Let’s build the fervor and excite-ment that accompanies the discovery ofmutual interest; use the cooperative busi-ness form to enhance members’ competi-tiveness in domestic and internationalmarkets and emphasize the positive in ouroutlook and discussions.”

Manage Industry or Face Price CutsEither work together in solving industryproblems or risk having someone else doit who is less interested in your well-being, Jim Barr, chief executive officer ofthe National Milk Producers Federation,tells delegates at its 71st annual conven-tion. “We must choose whether we wantto manage our production as an industryor whether we want it managed for usthrough price cuts. If we fail to choose,the decision will be made for us.”

Co-ops Increase Clout in Processing SoybeansSoybean processing plants in the upperMidwest owned by Farmland IndustriesInc., Land O’Lakes Inc., and Boone Val-ley Cooperative Processing Associationhave combined into a new cooperative, AgProcessing Inc., based at Omaha, Neb.The combined organization representsabout 9 percent of the nation’s soybeanprocessing capacity. It has assets of about$160 million and a sales base exceeding$1 billion.

Strong Family Farms, Co-ops onHorizon: NCFC’s NadenStronger family farms, maybe organized ascorporations, will emerge from the presenttrend toward specialization on the farm,higher cash cost and fewer cooperative

members in the next 20 years. This willtrigger a need for stronger cooperatives,predicts Kenneth Naden on the eve of hisretirement after 19 years at the helm of theNational Council of Farmer Cooperatives.

“Cooperatives can achieve growth inshare of market and market power byimproving all phases of their operations,finances and member relations. They cangain a greater share if more existingmembers use their cooperatives and stillothers join a cooperative...(to) gain agreater share of the market,” he says.

Encouraging more farmers to buy theirsupplies and market their productsthrough cooperatives and providing muchneeded capital is tied to “finding a pro-gram that works to implement basic coop-erative principles. Among recent legisla-tive gains, Naden cites a cooperativeamendment to the Federal Trade Com-mission (FTC) authorization bill banningFTC investigations of agricultural mar-keting orders and conference languagereaffirming authority of the Capper-Vol-stead Act. Another legislative victory hecites is passage of the Farm Credit Actamendments that provide financing ofcooperative exports, more liberal lendingpolicies for young farmers, and re-estab-lishing the Agricultural Cooperatives Ser-vice as a separate USDA agency.

Antitrust Commission EyesModifications to Volstead ActTwo modifications regarding the Capper-Volstead Act have been recommended tothe National Commission for Review ofAntitrust Laws and Procedures. The firstproposal is that agreements among coop-eratives — such as mergers and market-ing agencies in common — should not beallowed if competition is substantiallydecreased. The other proposal would rede-fine the “undue price enhancement” termin the Act and make enforcement sepa-rate from USDA’s cooperative promotion-al responsibilities.


Farmland Foods Among Top 10 Hog ProcessorsFarmland Foods, a subsidiary of Farm-land Industries Inc., at Kansas City, Mo.,is now among the nation’s top 10 hogprocessors. Chairman Gordon Leithreports that sales topped $647 million.Savings of nearly $14 million resulted inrefunds, averaging $4.69 a head for hogsand $4.92 a head for cattle for the 11,000hog and cattle producer-members.

Ag Co-op Earnings Up DramaticallyReflecting the general trend of agriculturein the mid-to-late 1980s, the nation’s majoragricultural cooperatives are striving touse their resources more efficiently, areeliminating operational duplication andredeploying assets. The Agricultural Coop-erative Service’s annual survey of thenation’s 100 largest cooperatives alsoshows that they are consolidating toimprove plant operating efficiency, provideless-costly farm supplies or enhance mar-keting services for members. Managementstaffs are being reduced, personnel prunedand unprofitable departments closed.Overhead and operating expenses arebeing slashed and tighter control is beingmaintained over inventories.

Total revenue for the top 100 co-ops rose1.6 percent, to $43 billion; net marginsbefore losses increased 60.4 percent, to

$756 million; net losses dropped dramati-cally from $272.4 million to $38.7 million;total assets climbed 2.4 percent, to $15.9million; and member equity increased 6.6percent, to $6 billion. Five of the nine coop-erative commodity groups had higher rev-enues in 1987, the largest gains being inthe fruit/vegetable and dairy groups. Thepoultry and livestock groups showed thelargest drop in revenues.

National Bank for Co-ops FormedA new National Bank for Cooperatives hasbeen formed, resulting from the combina-tion of 8 of 12 district banks and the Cen-tral Bank for Cooperatives (CBC). Thebank, formed in 1989, has authority toserve agricultural cooperatives, rural util-ity systems and eligible associationsthroughout the United States. W. MalcomHarding, former CBC president, has beenchosen new chief executive officer andDouglas Sims, president of the St. LouisFarm Credit Board, as chief operating offi-cer. The merger plan was developed by aspecial committee after Congress approvedthe Agriculture Credit Act of 1987.

Watch Activity in Five Areas, Leaders CautionSpeakers at the 1989 annual meeting ofthe National Council of Farmer Coopera-tives are cautioning cooperative leaders to

carefully follow activity in five areas withthe potential to have detrimental or bene-ficial impacts on their organizations. Theseinclude: 1) new attempts to reduce the fed-eral deficit; 2) implications of leveragedbuyouts occurring with increasing fre-quency in the business world; 3) resolu-tion of issues and problems in interna-tional trade; 4) changing consumerattitudes and preferences; and 5) rural eco-nomic development initiatives. New lead-ership in the nation’s Capitol is expectedto develop new solution alternatives,speakers advised. And the impact of thosealternatives on agriculture and coopera-tives needs to be carefully assessed.

CoBank Formation Proves FruitfulIn its first year of operation, CoBankformed through the merger of 11 of the13 district banks for cooperatives, provedfruitful. It has improved operations, tothe benefit of member cooperatives andtheir farmer-owners, says W. M. Harding,bank president. “We reduced costs,assured rural America of the existence ofa strong cooperative bank and strength-ened member control.” Net income for1989 of $92.95 million was up 35 percentfrom 1988. ■


Hallmarks of the ‘90s: Merger-Mania and Co-op Fever

Lack of Dairy Consolidations Hurts FarmersAfter 31 years as a director, including 15years as chairman at Wisconsin DairiesCooperative, Herb Selbrede laments thelack of consolidations among dairy coop-eratives in his state. “It [industry consoli-dation] should have happened,” he says,but divisions in the country and amongdirectors and managers prevented it. Somefarmers think competition keeps prices up,he says, “but competition also costs you alot of money.” So both in the country andpolitical arena, producers are still failingto reach a consensus so they can speakwith a unified voice, he adds. “The onething that has helped us over the yearswith mergers has been that we share infor-mation. We lay all issues on the table soeveryone knows what we’re doing.”

Co-op Restructuring Lead Issue for 1990sCooperative directors and managersbelieve cooperative restructuring is thesingle largest issue facing them, accord-

ing to a survey conducted at the ArthurCapper Cooperative Center. David Bar-ton, the center’s director, says it is clear-ly the most important business and eco-nomic issue co-ops will face in the 1990s.Research at Kansas State University indi-cates that the most efficient and profitablesize for cooperatives in Kansas is muchlarger than existing sizes. Substantialeconomies of scale appear to exist up to(at least) sales of up to $30 million. Thetypical current operation has sales of $7million.

Politics is the root cause for the predom-inance of small cooperatives, Barton said.

“Cooperatives will not achieve theirfull potential to provide economic benefitto patrons until patrons are convincedand agree that this benefit is achievableand more important than alternative ben-efits,” Barton said.

Social Issues Challenge Co-opsGrowing activism in the United Statesover social issues such as the environment,animal rights, food safety and employeehealth are challenging cooperatives, Jim-

my Loftis, member relations director forGold Kist, tells participants at the 1990Eastern Member Relations Conference. Hecites these potential danger areas for coop-eratives: pesticides on fruits and vegeta-bles; antibiotics and hormones in livestockproduction; hazardous waste disposal;employee health concerns — includinginjury claims from repetitive motions inprocessing; and protests at broiler houses,testing laboratories and feedlots by ani-mal rights advocates. “What is your plan?How will you respond?”

Emerging Technology to Impact DairyingMembers should take a broader view ofemerging technology that will be a “moverand shaker” of our economy long afterwe’re gone, Dairylea President ClydeRutherford cautions.

These new technologies will be a pre-dominant force in the 1990s, he says,stressing that “pieces of this technologymay be the only answer to remainingcompetitive in an era of upsizing farms,”he said.

Growth on NCBA’s 75th HorizonAt age 75, the National Cooperative Busi-ness Association (NCBA) has gainedstature in four areas: 1) governmentaffairs; 2) membership; 3) internationalcooperative development; and 4) domes-

1990s

Dave Studebaker, Haven Cooperative, Haven Kan.USDA Photo by Dan Campbell. Dairy farmers Clark and Joy Vilter, members of Golden Guernsey, Milwaukee, Wis. USDA Photo by Ken Hammond.

tic cooperative development. ChairmanRod Nilsestuen characterizes NCBA’s roleas being the “common ground for jointaction for all cooperatives. We provide ser-vices that a single cooperative or associa-tion can’t...build relationships with pro-fessionals in other organizations andthereby broaden our membership baseand corresponding income.”

President Robert Scherer detailsNCBA’s diverse interests, which includesupporting cooperative financial institu-tions and promoting cooperative develop-ment in agriculture, housing, financialservices, health care and education.NCBA is helping shape national stan-dards for organically grown produce cer-tification and exploring services for urbancooperatives in child care and health careand initiating a trade and business devel-opment center for Eastern Europe.

Indiana Co-op, Countrymark Launch Joint VentureAfter a year of common management, Indi-ana Farm Bureau Cooperative Associationand Countrymark Inc. have formed a jointventure for their regional cooperative farmsupply and grain marketing interests. Thisaction has been taken in response to tighteconomic conditions in agriculture. The co-ops had combined sales in 1990 of $2.4 bil-lion and net income of $9.55 million. Totalassets are $428.4 million and long-termdebt is $67 million. In its Ohio-Michiganterritory, Countrymark had 117 membercooperatives and 22 farm centers. IFBCAhad 57 member cooperatives in Indiana.Eight member cooperatives belonged to

both regionals. Real economies of scaleresulting from the merger will occur in fis-cal 1992.

Squeezing More Profit from Sugar BeetsAn $18 million, one-of-a-kind operationfor extracting sugar and other productsfrom sugar beets has been built atRenville, Minn., by Southern MinnesotaBeet Sugar Cooperative. It processes175,000 tons of pure beet sugar, 82,000tons of beet pulp pellets and 80,000 tonsof beet molasses annually. The pellets arefed to dairy and beef cattle and sheepwhile beet molasses is used for the phar-

maceutical and liquid feed businesses. Inlooking ahead, President Irvin Zitterkopfobserves: “The future of the cooperativeand the industry in this area rests on thecontinued willingness of growers andemployees to use these changes.”

Merger Equals Survival in IndianaDean Kaesebier, La Porte County (Indi-ana) Farm Bureau Cooperative’s manag-er of 12 years, has guided his local coop-erative’s combination with twoneighboring co-ops during a 20-monthperiod. As a result, sales have tripled to$56.5 million, with $36.1 million of thatamount derived from grain marketing.


Oliva Hernanez, second from left, and her daughters, who were organizing a dairy goat cooperative in Redford,Texas. USDA Photo by Larry Rana


“The merger affected patrons, employeesand the cooperatives differently,” he says.“In today’s market, merger becomes a mat-ter of survival.” He offers these mergertips: blend employees by moving somefrom one cooperative to another; avoid get-ting entangled in small details and be sureto force the right thing. Two cooperativescan’t merge unless one agrees to give upcontrol, he notes. Branch offices must bestaffed with capable people who have pow-er to solve problems. That keeps solutionscloser to the members being served.

Colorado Co-op Grows RapidlyConsolidations and a merger have putAmerican Pride Co-op at Brighton, Colo.,on the crest of a wave that’s building a$20-million operation with 6,000 mem-bers. The co-op’s sales volume has near-ly tripled in just four years. Al Shively,who has managed the Colorado coopera-tive since 1987, is also a director and offi-cer of Farmland Industries. A competentstaff is one of the keys to absorbing busi-nesses, Shively says. “I’m not afraid tohire good people. It makes for a good coop-

erative. That’s why we have five formerlocal managers from elsewhere in theFarmland system. Each manages one ofour divisions. They bring in a lot of ideasand expertise.”

Farmland Acquires Union EquityUnion Equity Cooperative Exchange(EU), the Oklahoma-based grain mar-keting cooperative, has become the graindivision of Farmland Industries andboosted unified sales to $4.7 billion. Far-Mar-Co, Farmland’s grain marketing sub-sidiary until 1985, had previously beensold to EU. All of EU’s 434 member coop-eratives were also members of Farmland.Due to rapid changes in the grain indus-try, such as the federal government’s exitfrom the grain storage business, EU hadcut its workforce 40 percent and closedseven terminals.

Qualla Markets Cherokee CraftsQualla Arts and Crafts Mutual, operat-ing on the Cherokee Indian QuallaBoundary reservation in North Carolina,

markets the crafts produced by the East-ern Band of Cherokees. Sales in 1991exceeded $750,000, an important sourceof income for the co-op’s 300 members.

New Co-op Center in North DakotaA center for cooperatives at North Dako-ta State University at Fargo has beennamed after the late U.S. Sen. QuentinBurdick, a strong supporter of coopera-tives and rural issues. David Cobia, pro-fessor of agricultural economics at theuniversity, is acting director. It will serveas a resource center for cooperatives andmembers and work to increase under-standing of cooperative businesses andtheir economic role.

CRI Co-op Unites Dairy InterestsA member-owned holding company, Coop-erative Resources International, has beenformed by two major Wisconsin coopera-tives associated with the dairy industry.The restructuring by 21st Century Genet-ics and Wisconsin Dairy Herd Improve-ment Association will benefit more thanhalf of the state’s 30,000 dairy producersby controlling costs and improving ser-vices. It’s the first link between a herdimprovement association and a providerof artificial insemination services.

Packing Shed a Boon to Vegetable GrowersOpening a new $100,000 packing shed inPetal, Miss., was a big step for IndianSpring Farmers Association in 1993.Annual sales for the 40-member vegetablegrowers cooperative, formed in the 1960s,are expected to hit $1 million in a fewshort years. The cooperative had beenfield packing or renting space in a state-owned packing facility. Its first contractfor a value-added product packed withnew equipment was with a Minnesota-based food service company for weekly

Rancher Ken Dillingham, Hawaii Cattle Producers Cooperative Associaition, Hilo, Hawaii. USDA Photo by DanCampbell


shipments of 5,000 bags of two-pound cutand washed collard greens. It is hopedthat cooperative such as this can help pre-serve black farmers in the South.

Hawaiian Co-op Took 25 Years to BrewAfter 25 years in the brewing stage, com-peting coffee growers on the island ofHawaii have merged, forming the newKona Pacific Farmers Cooperative inorder to gain more market clout and pos-sibly stabilize or reverse a trend of dimin-ishing market share. Growers in bothcooperatives produce gourmet Kona cof-fee and macadamia nuts. The merger wasprompted in part by steep drops in coffeeand macadamia nut prices. The boardnow requires new members to sign a mar-keting agreement to deliver all their cropto the cooperative.

Rural Women Gain from Craft Co-opThe Watermark Association of Artisansoperating out of Camden, N.C., is anexample of what the rural poor canaccomplish through a cooperativeapproach to business and life.

The craft cooperative has carved anever-widening market niche in a highlycompetitive crafts trade and providedtraining to members to improve or learncraft-making skills. Hundreds of ruralwomen in North Carolina gained not onlya source of income but also a new senseof accomplishment. Formed in 1978 by 35women who pooled efforts to sell crafts,the cooperative had grown to 750 by 1993and their products are being sold aroundthe world.

Bergland: Spread Rural Job BaseInstead of states fighting each other for“the newest manufacturing plant and its10,000 jobs, America should be looking tocreate a new job at 10,000 differentplaces,” says Bob Bergland, president of

the National Rural Electric CooperativeAssociation and former U.S. secretary ofagriculture. Speaking at the EasternMember Relations Conference, Berglandsays if 10,000 firms which currentlyemploy two people each have the eco-nomic incentive to expand to threeemployees each, the rural economy of theentire nation benefits, not just one luckytown or county that wins a new manu-facturing plant. It will take a private andpublic partnership to create conditionsthat pave the way for a stronger ruraleconomy, he says.

Co-op Fever Erupts on Northern PlainsThere’s a fever erupting on the NorthernPlains that’s being driven by a major resur-gence of producers seeking to add value totheir crops and livestock via cooperatives.

They represent attempts to answerproblems identified during the agricul-tural downturn of the 1980s. One of theearly successes was Dakota Growers Pas-ta Co., formed by Northern Plains durumwheat growers. Members invested an

average $14,000 in risk capital, demon-strating their commitment to the cooper-ative. The new processing plant — fea-turing the cooperative’s own brand nameof pasta products — was met with wide-spread success in the retail marketplace.The pasta co-op has sparked the creationof other cooperative efforts, such as theNorth American Bison Cooperative,Northern Corn Processors Cooperativeand Northern Plains Organic Cooperative.

Minnesota Co-ops Spark Rural ResurgenceBumper crops from the 1994 season holdever-greater promise for rural communi-ties in Minnesota because of the resurgenceof new cooperatives which can absorb theproduction. Instead of simply selling theraw materials their crops represent, pro-ducers are forming value-added coopera-tives to generate an increasing share of theconsumer food dollar. Agricultural econo-mists say the plants are part of a new wavethat will reshape the food system.

Farmers and rural residents have

Doc Throlson, North American Bison Cooperaitve, New Rockford, N.D. USDA Photo by Dan Campbell


invested at least $1 billion of new capitalin new plants at various stages of develop-ment in Minnesota, Wisconsin and theDakotas. They range in size from a $245million corn sweetener plant planned forthe Red River Valley to small marketingco-ops for organically grown vegetables inWisconsin and to process and market farm-raised venison in Minnesota. Rural com-munities are benefitting from the econom-ic stimulus new cooperatives generate.

Consolidations Drive New ForemostThe number of Wisconsin dairy farms hasplunged from 143,000 in 1950 to 30,150 in1992. This trend set the stage for the con-

solidation of Wisconsin Dairies at Barabooand Golden Guernsey at Milwaukee toform the new Foremost Farms USA. Thenew cooperative has 5,500 members andsales of $778 million. Cheese productionaccounts for nearly 72 percent of WisconsinDairies’ sales. Subsequently, the MidStates region of Associated Milk Produc-ers Inc., merged with Foremost.

Co-ops Urged to Pursue FoodProcessing ProjectsA Minnesota agribusiness managerdreams of building a cooperative thatranks among the nation’s major food mar-keters. Lamenting the lack of significant

cooperative presence among major U.S.food companies is Joe Famalette, presi-dent and chief executive officer of Ameri-can Crystal Sugar Co. “Why don’t grow-ers own more of the U.S. food chain?Agriculture in America has to change andthe sooner the better. ...We are not justgrowers and producers. We are foodprocessors,” he asserts.

ValAdCo: Bringing Home the BaconA swine breeding cooperative, ValAdCo,which adds value to corn crops, wasopened in Renville, Minn., with 38 grow-er members. Its first farm, a 1,250-sowoperation, began selling barrows and gilts

Ben Burkett, Indian Springs Farmers Association,Petal, Miss. USDA Photo by Ken Hammond

Sharon Begay, president of Dine Be Iina (Lifeway ofthe People), a Navajo craft cooperative inArizona.USDA Photo by Ken Hammond

Velma Cardwell, Cabin Creek Quilters Cooperative,Charleston, W.V. USDA Photo by Ken Hammond


in 1993. A 2,500-sow multiplier unit wasadded 1995. The two farms were expectedto produce 76,000 animals annually. Val-AdCo and Cooperative Country FarmersElevator later constructed a 10,000-ton-a-year feed mill, with potential to expand.It provides feed for a new 2-million-henegg-laying facility owned jointly by theelevator and a private firm.

California Gold Brand Pays OffAfter years of supplying the market withbulk dairy products, the board of Califor-nia Cooperative Creamery at Petalumaentered into the branded cheese marketwith its “California Gold” label and founda needed spark to rejuvenate the cooper-ative. After a decade of limited growth,membership climbed from 320 to nearly500 and sales jumped from $220 millionto $450 million. Its cheeses are now foundin stores around the state and even inJapan and Mexico.

Blue Diamond Still Going GlobalWalt Payne advises cooperators to con-tinue to “think global.” As the new chiefexecutive officer of Blue Diamond Grow-ers, he knows what that entails, since hiscooperative exports almonds to 100 coun-tries. “Each market has a unique devel-opment story. You really can’t develop acookie cutter approach to export marketdevelopment,” Payne says. “You must doyour homework to identify your marketopportunities and then channel what willwork for you in that country.”

California Co-ops Celebrate a CenturyTwo California marketing cooperativesmarked their 100th birthdays during the1990s. Danish Creamery Association(DCA) at Fresno is the oldest continual-ly operated cooperative, and its still goingstrong, with 1995 sales of $210 million.Butter and dried milk are marketed byDCA. It has a majority interest in Chal-lenge Dairy Products Inc. Also turning100 is the Sunkist Growers citrus coop-erative. From humble roots in 1893, with60 struggling citrus members, Sunkisthas blossomed into a $1-billion-a-yearcooperative with 6,500 members in Cali-fornia and Arizona.

United Sugars Eyes Market CloutThree Upper Midwest sugar beet growercooperatives have formed United SugarsCorp., a marketing agency in common. Itwill market 100 percent of the sugar theco-ops produce in seven factories. Part-ners are American Crystal Sugar, Minn-Dak Farmers Cooperative and MinnesotaBeet Sugar Cooperative. Other than forsugar marketing, each cooperativeremains autonomous. United has becomethe nation’s fourth largest sugar suppli-er, with annual marketings of about $800million.

Elsie Martinez, Ramah Navajo Weavers Association, Ramah, N.M. USDA Photo by Ken Hammond


NCBA Forms Development InstituteNational Cooperative Business Associa-tion has created the CLUSA Institute forCooperative Development to act as a cat-alyst for building and sustaining part-nerships among its members and otherorganizations to promote economic devel-opment through cooperatives in the Unit-ed States and overseas. The mission seeksto replicate successful cooperatives.

Tree Top Sprouts Record EarningsTree Top, the apple and pear marketingcooperative based at Selah, Wash., ismarking fiscal 1996 with record earningsof $49.4 million, topping its previous 1995

record of $34.6 million. Total proceedsinclude $3.5 million in profit, which reflectsthe earnings members receive above theaverage cash market. Annual sales havedipped from $229.9 million in 1995 to$218.4 million in 1996 as did tonnage,although supply was greater than antici-pated. For the first time in many years,the cooperative received more than 50 per-cent of the Washington state apple crop.

Co-ops Cautious Toward Ethanol Fuel ProjectsDespite the general enthusiasm forrenewable energy from the heartland andcooperative involvement in the subsidizedethanol industry, the pace has been slowand cautious. The St. Paul Bank for Coop-eratives, which has been assessing theviability of ethanol projects for 15 years,finances only a few. Some 42 plants pro-duced 1.54 billion gallons of ethanol in1996, up substantially from the 1979 pro-duction of 20 million gallons.

Ocean Spray Cranberry OpensResearch CenterAn agricultural research center with allthe components of an agricultural exper-iment station has been opened by OceanSpray Cranberries at its new headquar-ters site at Lakeville-Middleboro, Mass.The new center enables Ocean Spray toconduct flexible, problem-solving researchin seeking solutions to problems facingtoday’s cranberry industry. Since itsfounding, Ocean Spray had been based athistoric Plymouth, Mass.

Hedge-to-Arrive Contracts SnareSome Grain Co-opsHedge-to-Arrive (HTA) contracts havebecome a nightmare for a number of pro-ducers and grain cooperative managersin 1996 and beyond. The price risk asso-ciated with HTA contracts is not a prob-lem in a normal post-harvest grain mar-keting pattern. But sharp, unexpectedgrain price increases in the spring andsummer of 1996, however, caught manyproducers and cooperatives in speculativemarket positions. Failure of both partiesto honor HTA contract conditions is oftenleading to litigation in the courts. Somecases are still pending.

Marketing Agreements Must Be EnforcedA cooperative must enforce its membermarketing agreements to protect its rep-utation in the marketplace and the inter-est of loyal members, according to FrankKronynenburg, former chairman of theCalifornia Canning Peach Association.Members must look at factors other thanprice, such as the stability of the marketcreated by the cooperative and improvedterms of trade.

Sun-Diamond Growers Settles LitigationA $13.4 million settlement was reachedbetween Sun-Diamond Growers of Califor-nia and its federated cooperative members,Sun-Maid Raisin Growers and DiamondWalnut Growers, regarding overpayments

Kerry Kennedy, production manager of theCulpepper (Va.) Farmers Cooperative. USDA Photoby Ken Hammond


disclosed in 1985. Funds necessary toaccomplish the settlement will be paid byvarious insurance companies.

Harvest States Introduces ‘Harvest Mark’ PoolingA new grain pooling plan has beenunveiled by Harvest States Cooperativesof St. Paul, Minn., during a series of meet-ings with 60 select local elevator man-agers and President Allen Hansen. Poolsare used as a vehicle for handling therisks in grain marketing because theyenable local managers to cooperate on acost-plus basis in the same way they nowhandle government grain.

Co-ops Cotton to Blue JeansIn a vivid example of how U.S. coopera-tives add value to raw farm products,each year, 28 million pairs of Levi Straussjeans are stitched together from rolls ofdenim produced by Plains Cotton Coop-erative Association in Littlefield, Texas.The denim stems from 120,000 bales ofbillowy white cotton that flows into thecooperative’s textile mill, which is con-tained under one huge, 10-acre roof.

‘Dough’ Expectations Rise in ColoradoBoth business expectations and breaddough were rising in Longmont, Colo., as227 wheat growers have formed theMountain View Harvest cooperative topurchase Gerard’s Bakery and transformtheir crop into a value-added product.Nearly half of the more than 500 farmers

who attended a series of 60 grower meet-ings opted to invest in the cooperative.

Florida Co-op Juice Brand GrowingCitrus World’s total juice products repre-sent $450 million a year in sales and itsFlorida’s Natural juice brand provides itwith 18-percent share of the not-from-con-centrate juice market, which ranks it sec-ond in the nation. The 65-year-old coop-erative’s orange and grapefruit juices arenow exported to 50 countries.

California’s Hmong Refugees Form Co-opOnce refugee tribesmen from SoutheastAsia, Hmong farmers have joined forcesin California and found a possible routeto economic self-sufficiency via a freshvegetable marketing cooperative. A five-story historic building in Fresno providesoffice space for the Hmong-AmericanCooperative and Hmong MulticulturalCenter. USDA funds totaling more than$121,000 will help the Hmong farmerswith cooperative education.

Beef Co-op for CowboysFaced with falling livestock prices andcorporate inroads in the packing indus-try, hundreds of cattle producers from 23states have formed a new cooperative:U.S. Premium Beef. The co-op purchaseda major interest in a beef-processing com-pany owned by Farmland Industries, andis pursuing larger profits with a value-added strategy. “This has never happened

before,” says Tim Ryan, a Kansas direc-tor. “Cattle producers have never beforebought into a packing company or becamepart of a vertically integrated systemwhere they own a piece of everything fromconception to consumption.”

1990s Legacy: Tidal Wave of Changes for Co-opsThe impact of rapid changes in agricul-ture — reduced farmer numbers but con-solidated acreage among survivors andhigher crop yields resulting from newtechnologies — created profound changesin the 1990s. This was seen nowhere moreclearly than in the number of major coop-erative mergers and consolidations.

Steve & Margo Sayre family, Dodge City (Kan.)Cooperative Exchange. USDA Photo by Dan Campbell


Two major dairy cooperatives withcoast-to-coast connections were created.Land O’Lakes (LOL), Minneapolis, Minn.,stretched east to merge with AtlanticDairy near Philadelphia and then extend-ed itself westward to absorb Dairymen’sCooperative Creamery Association atTulare, Calif. Both of those co-ops hadmanufactured LOL butter for years. Aneven larger co-op was created when DairyFarmers of America, based at KansasCity, was formed by the merger of Mid-America Dairymen, the Southern Regionof Associated Milk Producers Inc., MilkMarketing Inc. and Western Dairymen.It later added California Gold.

Southern States Cooperative of Rich-mond, Va., stretched to the Midwest toacquire Michigan Livestock Exchange. Itthen bought the seven-state farm supply,grain, peanut and cotton business and 100retail stores from Gold Kist in Atlanta,Ga. Goldkist will now concentrate on thepoultry business. CENEX and HarvestStates merged to create the nation’slargest cooperative. This was preceded bya feed joint venture between CENEX andLOL . An 11-year-old agronomy joint ven-

ture between LOL and CENEX continues.Farmland Industries and CENEX Har-vest States subsequently formed a petro-leum marketing and distribution venturecalled Country Energy LLC.

LOL acquired Countrymark Inc.’s feedand fertilizer assets in Indiana, Ohio andMichigan. Countrymark then formed agrain joint venture with Archer DanielsMidland, similar to an earlierADM/GROWMARK alliance. In view ofCountrymark’s earlier joint feed venturewith the FS supply division of GROW-MARK, LOL will now supply feed to theFS member companies in Illinois, Iowaand Wisconsin and the Canadian provinceof Ontario. The FS Services feed employeeswill join LOL which leased the mills.Under the new alliance, GROWMARK willprovide petroleum supplies not availablefrom Countrymark to LOL member coop-eratives in Indiana, Michigan and Ohio,but LOL retains its fertilizer business,which earlier had been distributed througha joint-venture with Countrymark.

GROWMARK and LOL have alsodeveloped an alliance in seed. FarmlandIndustries acquired the assets of FS Ser-

vices after an earlier feed joint venture withits Arkansas-based neighbor. Farmlanddeveloped a similar feed manufacturingand marketing alliance with MFA Inc. inMissouri, and created a grain joint venturewith Con Agra. Statewide regional farmsupply cooperatives serving Tennessee andAlabama were also exploring an alignment.

Meanwhile, Pro-Fac Cooperative ofRochester, N.Y., acquired Curtice Burns,its joint venture partner in the fruit andvegetable processing industry, thenchanged the name of the now wholly-owned subsidiary to Agrilink Foods. Italso acquired Dean Foods’ vegetable pro-cessing division. It is in the process ofacquiring the frozen foods assets of Agri-pac Inc., a Salem, Ore., food processingcooperative. And on the banking horizon,St. Paul Bank has entered into mergerdiscussions with CoBank, Denver, Colo.

The first decade of the next millenni-um will be hard pressed to match all thischange! ■

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