RuralCoop MayJune08 draft4 · 12 Canadian farmers see benefits of local farm machinery co-ops ByColetteLebel ... 2 COMMENTARY 10 UTILITY CO-OP CONNECTION 38 NEWSLINE p. 25 p. 33

By Dallas Tonsager, Under SecretaryUSDA Rural Development

hese are exciting times for the cooperativemovement in America. There is agroundswell of grassroots interest in formingnew cooperative enterprises.Almost weekly, it seems, we hear of a new

co-op being formed to meet the growing demand for localfood or for organic/natural foods, to operate farmers marketsand to develop new community-supported agriculturenetworks. Other co-ops are being formed to producerenewable energy, to provide in-home care services for theelderly and handicapped, to build senior housing, to establishcommunity gardens and to help workers operate their ownbusinesses as co-ops, to cite just some of the sectors where weare seeing co-op development action.

What a great background this is, and an extra cause forcelebration, as we observe Cooperative Month in October!

This issue of Rural Cooperatives includes a Co-op Monthspecial section (see page 14) spotlighting the nation’s networkof cooperative development centers, a number of which arefeatured in this issue. These co-op development centers areplaying an important role in stimulating interest in, andfacilitating the development of, new cooperatives. In additionto the men and women who staff co-op development centers,we should also recognize the many established cooperativesand co-op organizations that sit on the boards and offer otherassistance to the centers.

Usually working with small staffs and limited resources,these co-op centers nonetheless are seeing more results fortheir efforts. As you will read in this issue, the types ofprojects these centers are involved with show that the co-opbusiness model is flexible enough to address almost any need.

The work of the Montana Cooperative DevelopmentCenter underscores this diversity of co-op applicability. Twoprojects it chose to highlight underscore both the “macro”and “micro” aspects of cooperative development. Regardingthe former, the Montana Center has helped to form a newtransportation cooperative created to improve bus serviceacross a three-state Rocky Mountain region. On the “micro”side, you can’t get more rural and local than the work theCenter did to help reopen the Last Chance Café as a co-op.

Of the latter effort, somepeople might scoff at expendingeffort on a business that createdonly three jobs. But as BrianGion, the Montana Center’sexecutive officer, notes, every jobis crucial in small rural towns, andthe continued operation of at leastone café can be so important to arural town, where it often servesnot only as place to get a mealaway from home, but as a socialcenter of the community.

In the article submitted by theKeystone Development Center, you’ll read about aPennsylvania co-op of Amish and Mennonite farmers —formed to supply organic produce to Philadelphia and NewYork City — that has seen its sales soar from $300,000 to$6.5 million in just the four years it has been in operation. InNebraska, the Omaha Farmers market, which reopened inthe mid-1990s after being closed for nearly 30 years, nowattracts 10,000 shoppers each season. In Maine, a co-op wasformed — with a big assist from the Organic Valleycooperative — to reopen the state’s only organic feed mill,which is a vital source of feed for the state’s organic dairyfarmers.

These are just a few of the examples you will read about inthis magazine. There are so many more promising new co-opstories to tell, but all we can offer here is a small sampling.

And while the focus of this special section of the magazineis largely on the co-op development centers and some of thestart-up co-ops they are involved with, I would be remiss if Ididn’t also use this space to salute the nation’s well-established co-ops. These include conventional farmmarketing and supply co-ops, farm credit co-ops and creditunions, rural utility co-ops and the many other types of co-ops that deliver such crucial services for their members andthe public. It is their successes, and the roads they followed,that serve as a model for today’s new co-ops.

As the theme of this year’s Co-op Month says, co-opsreally are: Local, Trusted and Serving You. Experience theCo-op Difference. �

2 September/October 2010 / Rural Cooperatives

CommentaryCo-op Movement Gaining Momentum

Dallas Tonsager

Features

Rural Cooperatives / September/October 2010 3

Volume 77, Number 5September/October 2010

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

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

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

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

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

Tom Vilsack, Secretary of Agriculture

Dallas Tonsager, Under Secretary,USDA Rural Development

Dan Campbell, Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?Call (202) 720-6483, or email:[email protected]

This publication was printed with vegetable oil-based ink.

p.4 p. 14

04 Ag co-op sales and income second highest on record

06 Chipping InAustrian co-ops play role in making nation a leader in wood biomass energy productionBy Scott Bagley and Bob Parker

12 Canadian farmers see benefits of local farm machinery co-opsBy Colette Lebel

13 Look Who’s Minding the StoreStudent-run supply co-ops short-lived, but the concepts they teach live on

14 Taking RootCo-op Month special section

35 eXtending Co-op KnowledgeExtension Service website to include co-op education areaBy Lynette Spicer

36 Biofuel PrometheusLike its namesake, Promethean Biofuels hopes to better mankind with new source of energyBy Stephen Thompson

Departments2 COMMENTARY

10 UTILITY CO-OP CONNECTION

38 NEWSLINE

p. 33p. 25

ON THE COVER: The nation’s network of Cooperative DevelopmentCenters play a major role in helping new co-ops sprout. A Co-op Monthspecial section, beginning on page 14, takes a look at some of thesecenters and the co-ops they are helping.

Editor’s note: Information for this article was compiled bythe Cooperative Programs statistics staff of USDA RuralDevelopment: Katherine C. DeVille, Jacqueline E. Pennand E. Eldon Eversull.

armer, rancher and fisherycooperatives had their second highestsales and income in 2009, trailingonly record 2008 levels. With lowercommodity and energy prices, gross

business volume of $170 billion in 2009 was down 11percent from the record $192 billion in 2008. Salesincreased in 2009 for farm supplies, crop protectants,seed and feed. There were also increased marketinglevels for rice, processed fruits and vegetables, sugarand tobacco. All other sales of supplies and crop/live-stock marketing fell from the record levels of 2008.

Dairy products sales had the largest declines, downmore than $9 billion from 2008, followed by declinesin grain and oilseed marketing of almost $3 billion;cotton sales declined by more than $1 billion. Dairyproducts and grain/oilseed sales were lower due toprice declines, while cotton experienced lower pricesand a large decline in production. In the farmsupplies sector, petroleum products sales declined byalmost $7 billion due to a combination of lowerprices and demand.

Net income (before taxes) of $4.4 billion was alsothe second best showing ever for farmer co-ops,although down almost 9 percent from the record $4.8billion in 2008. This minor downturn in net incomebreaks the string of four consecutive years where thenation’s agricultural cooperatives set a record for netincome.

“These sales and income figures for 2009, whiledown slightly from records posted in 2008, show thatthe nation’s agricultural cooperatives remain strong


AG CO-OP SALESAND INCOMESECOND HIGHESTON RECORD

Table 1—U.S. cooperatives, comparison of 2009 and 2008

Item 2009 2008 ChangeNumber Percent

Sales (Gross, Billion $)

Marketing 102.1 116.8 -12.60Farm supplies 63.2 70.2 -10.07Service 5.0 4.8 3.40Total 170.2 191.9 -11.27

Balance sheet (Billion $)

Assets 61.2 69.1 -11.41Liabilities 37.3 46.1 -18.96Equity 23.8 23.0 3.71Liabilities and net worth 61.2 69.1 -11.41

Income Statement (Billion $)

Sales (Gross) 170.2 191.9 -11.27Patronage income 0.9 0.9 4.63Net income before taxes 4.4 4.8 -8.86

Employees (Thousand)

Full-time 122.6 124.4 -1.47Part-time, seasonal 57.8 53.8 7.45Total 180.4 178.2 1.22

Membership (Million) 2.2 2.4 -5.98

Cooperatives 2,389 2,473 -3.40

Figure 1 — Cooperatives’ Gross and Net Business Volumes, 2000-2009

Billion dollars

200

175

150

125

100

75

50

25

02000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1 Includes inter-cooperative business.2 Excludes inter-cooperative business.

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Table 2—U.S. cooperatives net business volume, 2009 and 2008

Item 2009 2008 ChangeBillion $ Percent

Products marketed:Beans and peas (dry edible) 0.167 0.191 -12.5Cotton 2.022 3.332 -39.3Dairy 27.894 37.817 -26.2Fish 0.197 0.208 -5.5Fruits and vegetables 5.481 5.233 4.7Grains and oilseeds 43.899 46.222 -5.0Livestock 3.025 3.240 -6.6Nuts 0.835 0.832 0.3Poultry 1.171 1.457 -19.7Rice 1.686 1.395 20.9Sugar 4.220 4.092 3.1Tobacco 0.168 0.135 24.1Wool and mohair 0.006 0.006 -2.5Other marketing 4.471 5.615 -20.4

Total marketing 95.241 109.776 -13.2

Supplies purchased:

Crop protectants 5.452 4.497 21.2Feed 8.826 9.277 -4.9Fertilizer 10.659 9.941 7.2Petroleum 15.844 19.247 -17.7Seed 2.518 2.396 5.1Other supplies 4.225 5.320 -20.6

Total supplies 47.522 50.677 -6.2

Services and other income 4.978 4.814 3.4

Total business 147.741 165.267 -10.6

Figure 2 — Cooperatives’ Assets, Liabilities, and Net Worth, 2000-2009

Billion dollars

80

70

60

50

40

30

20

10

02000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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and viable and are a crucial business structure in theeconomy of rural America,” says Dallas Tonsager,under secretary for USDA Rural Development.“Dairy prices remain low in 2010, but livestockprices are rebounding and the economy is movingforward, pointing to increased sales.”

Net business volume hits $148 billionMarketing of food, fiber, renewable fuels and

farm supplies by cooperatives in 2009 all declined byabout 11 percent from 2008 (table 1), according tothe Cooperative Programs office of USDA RuralDevelopment. Net business volume of $148 billion(which excludes sales between cooperatives) was alsothe second largest ever, halting a general upwardtrend in sales that started in 2002 (figure 1 and table2).

The value of cooperative assets fell in 2009,mainly as a result of decreased inventories andreceivables due to lower prices of products marketedand sold (figure 2). Liabilities fell by 19 percentwhile equity capital held by cooperatives increasedalmost 4 percent, to nearly $24 billion. Equitycapital still remains low but is 6 points higher thanlast year and now represents 39 percent of all assets.

Patronage climbs 5 percentPatronage income (refunds from other

cooperatives due to sales between cooperatives)grew almost 5 percent, to $904 million, up from$864 million in 2008.

Farmer, rancher and fishery cooperatives remainone of the largest employers in many ruralcommunities, with 180,000 workers. The number offull-time employees decreased slightly in 2009, to123,000 (down 1,800 from 2008), while the use ofpart-time and seasonal employees increased 7percent, to 58,000.

Farm numbers continue to decline, with USDAcounting 2.2 million in 2009, losing less than 100farms from 2008. The number of farmercooperatives also continues to decline — there arenow 2,389 farmer, rancher and fishery cooperatives,down from 2,473 in 2008. Mergers account for mostof the drop, resulting in larger cooperatives.

Producers held 2.2 million memberships incooperatives in 2009, down 6 percent from 2008.The number of U.S. farms and cooperativememberships is now about equal, but this does notmean that every producer is a member of anagricultural cooperative. Previous studies have foundthat many farmers and ranchers are members of upto three cooperatives, so the decline in farmnumbers and cooperative memberships is not strictlycomparable. �

� Assets � Libilities � Net Worth

Austrian co-ops play rolein making nation aleader in wood biomassenergy production

Chipping In


By Scott Bagley,Center for Cooperative Forest Enterprises

Bob Parker,Oregon State University Extension

Editor’s note: This article is based on a report Bagleyand Parker produced for the Center for CooperativeForest Enterprises, which is part of the NationalNetwork of Forest Practitioners, based in Athens,Ohio, where Bagley is a Program Director. He can becontacted at: [email protected], or 740-593-8733.Parker is an associate professor and Extension foresterbased in Baker County, Oregon, and can be reachedat [email protected] or 541-523-6418.For additional details of the trip and photos, visit:http://nnfp.org/Resources/ Biomass.php.

ast June, we traveled to Europeto attend a symposium on small-scale forestry. Before themeeting, the National Networkof Forest Practitioners

organized a tour to visit some of Austria’sinnovative cooperative biomass-related projects,which we had been hearing much about.

We read as much as we could about theseoperations in advance of the trip, but theopportunity to see biomass facilities and talk tothe people involved in establishing and operatingthem provided us with a much better feel forwhat was happening and of the significantprogress the Austrians are making in this area ofrenewable energy, often through the use ofproducer-owned cooperatives.

First stop: Linz, Upper AustriaOur first stop was in the city of Linz, in the

state of Upper Austria. The primary purpose ofthis visit was to meet Christiane Egger, deputymanager of the O.Ö. Energiesparverband (theUpper Austria Energy Agency). OOE wasfounded in 1991 by the regional government topromote energy efficiency, renewable energysources and innovative energy technologies bytargeting residential households, municipalitiesand businesses. She is also the manager of theÖkoenergie-Cluster, a network of 150companies active in renewable energy andenergy efficiency.

Egger was recommended as someone weshould talk to by the U.S.-based BiomassThermal Energy Council (BTEC), a nonprofitassociation dedicated to advancing the use ofbiomass for heat and other thermal applicationsin the United States.

In advance of the trip, we had asked ourcontacts at BTEC and the U.S. Forest Servicefor any leads and/or contacts that could helpimprove our understanding of the Austrianwood-biomass system. Egger had been in theUnited States several times to discuss theAustrian experience in diversifying their energymix, most recently last April to address the“Heating the Northeast with RenewableBiomass” conference in New Hampshire.

During our meeting, we talked about thework of her agency in Upper Austria, focusingon some of the specifics pertaining to wood-based biomass. While Upper Austria has taken acomprehensive approach to energy

This district heating facility (left) in Austria is located just down the hill from a historic cathedral.Above: Bins of firewood dry prior to use in the high-efficiency, wood-gasification boilers that are

common in Austria. This creates a good market for split logs produced by farmers and forest owners.Above (right): The Pölstal Biomass Logistics Trade Center (BLTC). Photos courtesy the authors


diversification, it has demonstratedsignificant advances and leadershipin the field of biomass heating.

More than 40,000 wood chip andpellet heating installations can befound in Upper Austria, along withsome 300 district heating networksand 12 biomass power stations. Allof this is occurring in an area thesize of Vermont with a populationof 1.4 million. Theseaccomplishments owe much totargets having been set early on bythe regional government, andfurther advanced by the availabilityof comprehensive information,energy advice, awareness-raisingactivities and financial incentives.Or, as the Austrians like to note, bya combination “carrot-stick-tambourine” approach (thetambourine is a metaphor for theawareness-raising activitiesunderwritten by the state).

The steep upward trend inbiomass heating generation inUpper Austria is impressive, butthere is still a long way to go beforemeeting the government’s target ofproducing 100 percent of the region’sspace heat and electricity fromrenewable energy sources. That is thegoal set for 2030, which — if met —would be quite a feat, considering thatUpper Austria is a highly industrializedregion with an extensive manufacturingbase.

Second stop: Hartberg, StyriaFrom Linz, we headed southeast to

the Austrian state of Styria, also knownas Steiermark. Here, we met ChristianMetschina of the Austria Chamber forAgriculture and Forestry. He gave us atour of a new facility near Hartberg,known as a “biomass logistics and tradecenter” (BLTC).

The Hartberg BLTC was opened lastfall by the MaschinernringHartbergerland (Hartberg-areaMachine Ring), a cooperative offarmers originally organized to sharefarm machinery, such as tractors, and totrade labor. We were also hosted byFranz Schieder, managing director of

the Machine Ring cooperative and whooversees operations of the BLTC.

The BLTC in Hartberg provides astaging and sales outlet for firewood,enabling local customers to have thepeace of mind of knowing that they willhave a readily available supply of suitablequality wood for their heating needs.

Later in the visit, we toured a pelletmill, but in general, a surprisingamount of biomass material consumedin Austria is used as wood chips andfirewood. The Austrians have developedsome astoundingly sophisticatedtechnologies that have enabled them toengage in large-scale use of these less-processed forms of wood-basedbiomass. As a result of theirtechnological advances, some of thecommon arguments against woodheating systems — i.e., that they areinefficient, polluting and a hassle tomanage and maintain — are no longervalid, at least where these technologies(and technicians to install and maintainthem) are widely available. TheAustrian systems are highly automated,so they do not require much attention

once they’re up and running.Also noteworthy is that the less-

processed forms of wood-based biomassrequire less energy during production,meaning a smaller carbon footprint anda better score on the “carbon neutralityscale.”

While at the Hartberg BLTC,Christian Metschina gave us a shortpresentation on the development of thefacility and described how it fits withinthe overall cooperative. He alsooutlined the broader, multi-countrylearning network and support programfrom which the Hartberg projectemerged. This has involved partners inFinland, Sweden, Germany and severalother European countries.

At the time of our visit, the Hartbergfacility was the newest BLTC, althoughanother one was launched this pastAugust. The network of BLTCs isexpected to operate under certainguidelines to uphold standards. EachBLTC, though owned and operated byindependent cooperatives, collaborateswith one another for branding andmarketing purposes, including

Christian Metschina (center), of the Styrian Chamber of Forestry and Agriculture, and FranzSchieder (left), managing director of the co-op that owns the Hartberg BLTC, explain theiroperation to author Scott Bagley. The Styrian Chamber was instrumental in supporting theestablishment of the Hartberg center, similar to the way USDA-supported Rural CooperativeDevelopment Centers serve cooperatives in the United States.


use of a common logo.

Stop 3: Hartberg-area woodenergy contractor

Our third stop was at a small farmnear the village of Hartberg, where wevisited a farmer who is a member of acooperative that provides energyservices — in other words, he is a“wood energy contractor” who sellsheat. The cooperative built a heatingsystem and woodchip-storage facility ata member’s farm, which delivers heat(in the form of steam) to neighboringcustomers through a system of pipes.

The cooperative signs contracts withcustomers, making it responsible for allaspects of their heating. Thecooperative also serves other groups ofcustomers through arrangements thatinvolve renting a cellar or outbuildingto hold the heating systems and forwood chip storage. It then sells heat tothe user or owner of the building (andadjacent buildings if they are part of a“district” or network of facilities).Similar systems are in place for heatingother groups of buildings and multi-tenant structures.

Stop 4: Weinbach BiomassLogistics and Trade Center

We then drove a couple of hours toWeinbach, also in Styria, where we metChristian Schnedl, the director of theStyrian Forest Owners Association,which has also been helpful insupporting the cooperatives in gearingup as biomass and heat sellers. Our firstvisit with Schnedl was at another BLTCthat provides processing and is adistribution point for wood chips andfirewood.

Stop 5: Weinbach-area woodenergy contractor

We next visited another wood energycontractor with a set up similar to that

of the farmer we had met earlier. In thiscase, however, the farmer deliversservices through the equivalent of aU.S. limited liability corporation-typebusiness structure, making him adiversified farmer who has added “heatseller” to his resume.

He made it very clear, however, thathandling the energy part of hisoperation is not even close to being adaily task. Once his system was set up,it proved to be extremely low-maintenance and a mostly “hands-off”operation. The system automaticallyfeeds chips to the boiler and sends himupdates on his mobile phone and a fewtimes each year indicates when ashneeds to be disposed of (which he doesby spreading it on his garden).

Stop 6: Pölstal BiomassLogistics and Trade Center

Next we took an unguided tour ofthe BLTC in Pölstal, which opened in2007, the first such operation in Styria.Like the other BLTCs, it iscooperatively owned, in this case by 13farmers. It produces wood chips for usein small-scale heating systems anddistrict heating plants, as well asfirewood for residential customers.

ReflectionsThere are some good reasons why

Austria has invested so heavily insupport of wood-based biomass andrenewable energy. Kicking itsdependence on imported oil andavoiding natural gas supply disruptionsare two of the major incentives forpursuing renewable energydevelopment. A clear policy frameworkin Austria on greenhouse gas emissionsis another incentive, which has led to aninterest in reducing coal use. Theopportunity of providing additionalmarkets for Austrian farmers and forestowners is another motivating force.

We also sensed a pride andseriousness within the citizenry intrying to do their part to contribute toclimate change mitigation. Thealignment and comprehensive nature oftheir “carrot-stick-tambourine”approach has proven to be an effectiveway of developing renewable energyindustries for the benefit of ruralproducers. In the United States, wehave important programs, such as theUSDA Value Added Producer Grants,that can help incentivize cooperativeefforts along the lines of Austria’sBiomass Logistics and Trade Centers.But the scale of public and privateinvestments in biomass energydevelopment is overwhelmingly higherin Austria than in the United States, asare resources dedicated to spreadinginformation and awareness of biomassenergy to complement and bolster theefforts of private enterprise.

Investigating “best practices”emerging from the cooperativedevelopments in Austria, as well as theprograms and policies that aresupporting them, can help fine-tuneand deploy frameworks for enablingrenewable energy to expand biomassenergy production in the United States.We met many great people in Austriawho are more than happy to shareinformation about their progress andhelp others, including cooperatives inAmerica interested in developingsimilar enterprises that are distributedand scaled to more readily benefit ruralproducers and communities, while alsoencouraging sustainable land usepractices.

As we move forward with our woodbiomass industry, we must balance ourenthusiasm for expansion of biomass-to-energy developments with adetermination that we don’t deplete theresilience and future productivepotential of forests and woodlands. �

“Wood is not only a crisis-proof and cheap energy source, but also a home-grown rawmaterial that adds local value by creating and securing jobs and income within regions.”

— T. Loibnegger (author of: Telling the Story in Austria: Sustainable Wood Energy Supply)

By Anne M ayberryPublic AffairsUSDA Rural Developmente-mail: anne.maybe ry@ wdc.usda.gov

any electriccooperatives haveembarked uponsignificant changes inthe way they provide

electricity to rural members. O ne of themore significant changes is the growinguse of renewable fuel to produceelectric power.

To assist with the development ofrenewable energy, rural electriccooperative utilities across the countryhave joined forces to form a newcooperative: T he N ational R enewablesC ooperative O rganization (N R C O ).

T his new co-op for cooperatives wasestablished in 2008 to find ways forrural electric cooperatives to access adiversified, renewable-power portfolio.Because renewable resources are notevenly distributed throughout thecountry, gaining access to wind, solar,geothermal and biomass fuel resourcesis much harder for co-ops in someregions.

10 S eptember/O ctober 2010 / Rural C ooperatives

N R C O helping rural electr icspursue renewable energy

The 35 w ind turbines of the Stony Creek Wind project can produce a combined 52.5 megawatts of power. Southern M arylandElectric Cooperative and Old Dominion Electric Cooperative in Virginia are purchasing power from the project. Photos courtesyStony Creek Wind

Uti l i ty Co-op Connection

r


Most states now require electricutilities to establish renewable portfoliostandards and supply electricity fromrenewable-energy resources by aspecific date, so many rural electriccooperatives are looking for reliable andaffordable sources of “green energy.”This is where NRCO plays a role.

Cooperative members of NRCO caneither purchase power from, or investin, renewable energy projects. Thishelps cooperatives without access torenewable resources to tap intorenewable energy. As the rate ofdevelopment of renewable resourcesincreases, NRCO can help cooperativesmeet government requirements.

Initial agreementdelivers wind power

NRCO recently announced its firstagreement to provide wind power totwo member-systems: SouthernMaryland Electric Cooperative Inc.(SMECO) and Old Dominion ElectricCooperative (ODEC) in Virginia.NRCO is making this happen throughan agreement with E.ON Climate &Renewables North America, asubsidiary of E.ON AG, one of theworld’s largest energy companies.

Under the purchased-poweragreements, the two cooperatives(SMECO and ODEC) will purchasewind power from the Stony CreekWind Project for the next 18 years.Located in Somerset County, Pa., on asurface mine that once produced coal,the 35 Stony Creek wind turbines havea total possible output of 52.5megawatts.

“The Stony Creek Wind project willhelp SMECO meet Maryland’srenewable portfolio standard,” says JoeSlater, SMECO’s chief executive officer.“This agreement will provide a long-term source of renewable power at acompetitive cost. It is an innovative way

to use the cooperative business model— which has been successful indelivering electric power to rural areasfor nearly 75 years — to help ruralelectric cooperative utilities participatein renewable energy projects,benefitting rural communities.”

In addition to benefitting theenvironment, increased use ofrenewable resources represents a majoreconomic opportunity for rural areas,adds Jonathan Adelstein, administratorof the Rural Utilities Service of USDARural Development. “Rural Americahas the ability to supply this nation’sgrowing energy requirements,”Adelstein says. “By 2025, rural Americais likely to provide 25 percent of ourtotal energy needs. Renewable energydevelopment promotes energyindependence and creates jobs in ruralcommunities. It is no surprise that ruralelectric cooperatives are leading theway.”

According to data from the NationalRural Electric Cooperative Association(NRECA), nearly 90 percent of thenation’s cooperatives offer renewableenergy options to consumers. About 11percent of the electricity thatcooperatives distribute is generatedfrom renewable fuel sources, includinghydropower.

Aggregating demandThe idea for a renewable energy

cooperative originated with discussions

on how to address a fairly new, butquickly growing, industry issue.

“NRCO is the result of discussionsamong generating and transmissioncooperative utilities that wanted moreaccess to renewable projects. This hasgrown as an issue — driven both byconsumer requests and, more recently,renewable energy and (potential)carbon legislation,” explains ToddBartling, NRCO director of renewablesdevelopment. “As a cooperative entity,we are promoting the use of renewableprojects and facilitating theirdevelopment. Our role is to aggregatedemand.

“You need critical mass for financingthese projects and to get them built,”Bartling continues. “Ultimately, we lookfor projects that make sense for ourmembers. The long-term benefit is thepotential for us to own and developprojects to meet member needs.”Bartling says that wind projects arepopular because they can beconstructed within a year, while woodybiomass projects take several years tobuild.

In addition to developing renewablepower, SMECO’s goal is to offer adiversified energy portfolio, which canhelp reduce the volatility of powerprices by offsetting fluctuations in fuelssuch as natural gas. The cost of powerrepresents the biggest portion of ruralelectric cooperative utilities’ operatingexpenses.

Power-purchase contracts that expireat the same time traditional fuel costsincrease can pose affordability issues forboth business and residentialconsumers. “We look for ways todiversify our energy portfolio inkeeping with our risk-managementpolicy and keeping our ratesaffordable,” Slater says. “The StonyCreek Wind agreement does that.” �


Canadian farmers see benefitsof local farm machinery co-ops

By Colette LebelDirector Cooperative AffairsLa Coop fédéréee-mail: [email protected]

Editor’s note: this article is slightlycondensed from the July-August issue ofLe Coopérateur agricole, the memberpublication of La Coop fédérée, based inMontreal, Quebec.

t’s true, our farm machinery cooperatives (FMCs) arenew and relatively few. But they still deserveattention and support because they help to focus ourvision on sustainable development. The notion ofsharing naturally leads to a logical way of farming in

terms of economics, environmental conservation and maintaininggood neighbor relationships.

Not surprisingly, economics is probably what motivates mostfarmers to subscribe to an FMC. The beneficial impact of an FMCon a farmer’s budget can easily be proven. By sharing theequipment’s ownership, the cost of purchasing and operating theequipment is reduced for each member. This boosts profitability andthereby helps members to meet other budgetary obligations.

In terms of the environment, farm machinery cooperatives alsoencourage responsible consumption of resources. The equipment’s“life cycle” begins with the consumption of a huge amount of energywhen it is manufactured. When obsolete and discarded, farmequipment can become a blot on the landscape. Limiting individualconsumption by sharing material is therefore a responsible gesturefor the environment.

FMC fills gap when sawmills closeSeveral sawmills in the Abitibi region of northwestern Quebec

used to supply farmers with inexpensive, good-quality livestockbedding (litter). For the past few years, the forest industry has beenexperiencing a crisis that has resulted in the shutdown of several ofthese plants. The La Sarre and Macamic hospitals, in the Abitibiregion, have also endured the loss or reduction in waste wood tosupply their biomass boiler, which heats their buildings.

The FMC of Abitibi-Ouest has, since 2007, been involved in apilot project that is helping to offset the lost residual wood supplies

La Coop fédérée:a strong network forfarmers and consumers

By its nature as a cooperative – rooted inQuebec’s agricultural industry – and by its

key role in the greateragri-food chain, La Coopfédérée and its networkare natural partners tothose who take to heartthe harmoniousdevelopment of thecountry’s rural and semi-urban areas.

La Coop fédéréenow represents some90,500 members dividedamong 109 cooperativesof all types, fromagricultural supply

cooperatives to consumer cooperatives toprocessing cooperatives. Thesecooperatives meet a wide range of needs foragricultural producers and consumers whohave joined together to gain access tocompetitively priced, high-quality productsand services.

The cooperative employs 11,336 people inQuebec, Ontario and Alberta, and generatessales nearing $3.9 billion [Canadian]annually.

As a wholesaler, La Coop fédéréeprovides agricultural producers fromQuebec, Ontario and New Brunswick withthe goods and services essential tooperating their businesses, including oilproducts. Via its subsidiary, Olymel l.p., LaCoop fédérée processes and markets porkand poultry to local and internationalmarkets. It also oversees other activitieswith the help of co-enterprises, such asmerchandising pork genetics and soybeansfor human consumption.

La Coop fédérée is also responsible forkeeping the agricultural cooperativemovement’s community life alive, as well aspromoting the interests of its members tovarious public authorities and to the generalpopulation. �

continued on page 42

Photo courtesy La Coop fédérée


Editor’s note: article courtesy NationalFarmers Union

he business cycle maybe speeding up thesedays, but consider thecase of a supplycooperative that is

capitalized, patronized and thenliquidated all in the space of a week.Does this sound improbable? Yes.Educational? Definitely, and — in theend — that is the reason the co-opexisted, if only briefly.

To introduce youth to the concept ofcooperative businesses, summer campshosted by state and national FarmersUnion organizations guide campersthrough the business of cooperatives byhaving the students actually begin theirown co-op. Based on a proven businessmodel that meets an obvious need,these co-ops sell the “essentials”campers need: soft drinks, chips, icecream, sunscreen and souvenirs. More

recently, the offerings have come toinclude a wider choice of healthy snackfoods.

On the first day of camp, staff oreducation directors explain howcooperatives work and why they aredifferent from other types of businesses.Campers are given the choice offorming their own snack supply co-op.

Given the market need, this choiceresults in youth investing some of theirpocket change in shares in the newcooperative. It doesn’t stop there. Theyalso elect a board of directors, hire amanager and prepare a marketing plan.

Time and money on the line“Encouraging youth to form their

own camp co-op stores incorporates allkinds of learning opportunities,” saysMaria Miller, education director forNational Farmers Union. “Ourcurriculum focuses on leadership forrural America. When young people puttheir own time and money into their

own cooperative, they become moreserious about being actively involved ina project. And, they employ theorganizational and leadership skills thatthey can use when they return to theirhometown communities or college.”

Gina Dethlefsen of South Dakotawas president of the co-op boardelected by youth attending All-StatesCamp July 11-16 at National FarmersUnion’s Education Center at Bailey,Colo. She found that this “learn-by-doing” approach really connects withthe participants. “I have learned all thenecessary parts that it takes to have afully functioned cooperative,”Dethlefsen says. “I have also learnedthat it takes a lot of responsibility tohave a successful cooperative thatpeople want to buy shares in.”

At the end of camp, the co-op boardgives the financial report. This includesshares sold, overall sales and profits tomembers. The campers — make that

Look Who’s Minding the StoreStudent-run supply co-ops short-lived,but the concepts they teach live on


The camp co-op store was popular with camper-members, who voted todonate the proceeds to charity. Photo by Bob Kjelland


Northwest Cooperative Development CenterOlympia, Washington

ervices providedand area served:

Northwest Co-operative DevelopmentCenter (NWCDC) acts

as an advisor and provides facilitationand access to information and tools thatpromote effective cooperative businessgovernance and management. Specificservices include feasibility assessmentand analysis, organizationaldevelopment, cooperative education,business planning, strategic planning,market research, board training andgrant writing. NWCDC is a nonprofit501(c)(3) organization, working withco-ops in Hawaii, Idaho, Oregon andWashington.

Center history:Founded by cooperatives in 1979,

NWCDC has grown into the

Northwest’s leading provider of co-opbusiness development services.Formerly known as Puget SoundDevelopment Foundation, the Center’smission is to promote and strengthencooperatives in the region. In the springof 2000, NWCDC was reorganized andrenamed to include a broadergeographical area. To maximizeresources, skills and expertise,NWCDC works collaboratively withcommunity, government and economicdevelopment agencies, as well asestablished cooperatives.

Noteworthy project:NWCDC works in a variety of

sectors involving consumer, producerand worker cooperatives. The Centerendeavors to provide consistent qualityservices to its clients. NWCDCrecently entered into the ROC USA

Network as a certified technicalassistance provider to residents ofmanufactured-home communitiesseeking to purchase their property. As amember of the ROC USA Network,NWCDC has access to 100 percentcommercial financing with reasonableterms and conditions through ROCUSA Capital. The Center’s professionalstaff can efficiently determinecommunity residents’ interest inpurchasing a property. Staff can helpthem form a cooperative corporation topurchase the community and manage iton their behalf.

Impact of project oncommunity/area:

ROC USA supports homeowners intheir desire for economic security

The nation’s network of cooperative development centers are aprimary force in the creation of new cooperatives and support for existingcooperatives. The centers also play a major role in helping to spreadknowledge of the cooperative system of business. Through its RuralCooperative Development Grant (RCDG) program, USDA RuralDevelopment is a supporter of these centers, a number of which arefeatured on the following pages, along with examples of some of thecooperatives they have helped launch or otherwise provided support for.As we observe Cooperative Month in October, it is fitting that werecognize the important contributions that these centers are making tothe nation’s cooperative business system.

TakingRootCO-OP MONTH


Since 1923, Cowiche Growers has packed and shippedsome of the finest Washington apples and pears, which itgrows in the fertile soils of the Yakima Valley. As a grower-owned cooperative, it is committed to the preservation of thefamily farm. As a supporter of NWCDC, it is also committedto helping to promote the development of new cooperativesin the Northwest.

“Grower-owned cooperatives give small family farmersthe unique ability to compete with large commercial growingoperations,” says Mike Sliman, the co-op’s president andgeneral manager. “Over the years, the value of theNorthwest Cooperative Development Center has beeninvaluable to our success. The opportunity to go to onesource to get assistance for planning, education and trainingon cooperative matters has been especially helpful.”

This grower-owned cooperative currently consists ofmore than 65 members who farm about 3,000 acres, wherethey produce apples, pears and cherries. The volcanic andalluvial soils in the valley are rich and the growing season islong. The warm days and cool nights naturally enhance thecolor, crispness and quality of the fruit.

Cowiche Growers provides cold storage and packingfacilities for its members. Modern, state-of-the-art packingfacilities and controlled-atmosphere storage enable the co-op to provide high-quality fruit to its customers year round.

Its facilities, situated on 27 acres, are centrally located to

the farms, allowing for quick and functional procession fromthe tree to the packed box. The co-op’s fruit is sold throughDomex Superfresh Growers, one of the top fresh fruitmarketing firms in Washington state. The co-op packs about1.5 million boxes of apples per year.


Top: Antonio Artega and his son, Carlos Lopez, and the Chuck andDebbie Turner family (above) are members of the Cowiche Growerscooperative, which packs about 1.5 million boxes of applesannually. Photos courtesy Domex Superfresh Growers andCowiche Growers

Cowiche Growers: dedicated to producingquality fruit and spreading co-op concepts


through resident ownership.Goals are to: preserve andimprove affordable communities;build individual assets; and fosterhealthy, mutually supportivecommunities and leaders.NWCDC is currently in theprocess of assisting theconversion of five manufactured-

home communities inWashington and Oregon thatrepresent more than 600households.

Quote from staff member:“The moment is transfor-

mational when residentsrecognize that they are moving

from a rental relationship —where they had no control overtheir home security — into anownership position with theirneighbors.” — Ben Dryfoos-Guss,Manufactured Home CooperativeDevelopment Specialist �

CO-OP MONTH

Taking Root

Services provided and area served:Paradise Home Care Cooperative (PHCC) is a

worker-owned business with a mission to be thepremier home care provider in Hawaii County (onthe Big Island). PHCC represents professional,compassionate worker-owners devoted tohelping their clients live comfortably andindependently. The members are dedicated toenhancing the well-being of others throughinnovative, loving care and commitment to servethe community.

Cooperative history:PHCC has been six years in the making.

Beginning with a 2004 USDA grant from the RuralHome Care Cooperative Demonstration Program,the Big Island Community Task Force was formedto establish a home care co-op in East HawaiiCounty. Results of the feasibility study, completedin 2006, were favorable.

With the assistance of the NorthwestCooperative Development Center (NWCDC),charter members completed a business plan and

secured a working-capital loan. The loan cameas a result of an application by NWCDC to USDAto establish a revolving loan fund through theAmerican Recovery and Reinvestment Act of2009.

Growing need:The need for businesses that can retain a

workforce of caregivers is crucial for thegrowing population of people needing in-homecare, which this co-op will help to address. In anindustry plagued with high turnover, thecooperative business model supports anenvironment where workers have incentives tostay on the job for the following reasons:• The majority of workers are co-op members,

and, as such, own the business;• Owning the business — with hired professional

management — enables worker-owners to dowhat they do best: provide care.

• Profits go back to co-op workers via higherwages and patronage dividends for members.

• Benefits worker-owners receive include healthinsurance and someone to offer back-up care for clients when workers areill or on vacation.

Impact on community/area:PHCC represents a major employer

in the sparsely populated Puna Districtof Hawaii County. In its first year ofoperation, it will employ about 15caregivers and support staff; it expectsto grow to 50 caregivers over the nextfive years. �

Paradise Home Care Co-op meets critical need

Tim O'Connell, of USDA Rural Development's state office in Hawaii, explains the steps required to form aworker-owned cooperative during a workshop held prior to the formation of the Paradise Home Care Co-op.


hen Larry Snell wasasked in 2002 to headup the then-newKentucky Center forAgriculture and Rural

Development (KCARD), he neverimagined the organization wouldbecome a leading resource forentrepreneurs and establishedbusinesses in Kentucky and beyond.

”I knew the business developmentservices that KCARD was designed toprovide to the community were neededin Kentucky,” says Snell, KCARDexecutive director. “That is whatintrigued me about the job. But we havegone far beyond what I originallyenvisioned when the organization wasfirst beginning.”

Today, KCARD has clients across thecommonwealth, ranging fromindividuals or producer groups withonly an idea for a new business, toestablished cooperatives or businesseslooking at ways to become moreprofitable in a challenging economy.The KCARD staff provides a widearray of services to assist clients at alllevels.

“KCARD is dedicated to facilitatingthe development and growth ofagricultural and rural businessthroughout our state,” explains Snell.“We have an experienced andprofessional staff to help analyze abusiness idea, to help structure andincorporate the business and to assistwith capitalizing, management,marketing, accounting and legalconcerns.”

Fostering business succcessKCARD is a nonprofit 501(c)(3)

organization. Its mission is to fosterbusiness success and growth in ruralKentucky by developing and deliveringtechnical assistance and by providingeducational opportunities foragricultural and rural businesses seeking

to enhance their economicopportunities. As a cooperativedevelopment center, KCARD isdedicated to improving the economicconditions of rural Kentucky bypromoting new cooperatives andcontinuing efforts to improve existingcooperatives.

KCARD’s staff is familiar withvarious types of incorporatedagribusinesses and consults with groupson critical questions related toorganizing, incorporating, financing,management, marketing, accountingand legal concerns. It networks withother cooperative development centersand state and national organizations toassist with all aspects of agribusinessdevelopment.

One important business service theCenter offers is Strategic ProfitabilityPlanning & Implementation (SPPI), avery intense, hands-on service. Duringthe SPPI process, KCARD helps the

business identifyopportunities toimprove profitability,develop steps toaddress and follow upon these opportunities,and monitor and guidethe implementation ofthe action stepsoutlined. SPPI includesmany strategicplanning components,but it focuses more onshort-term actions toimprove profitability.

KCARD plays amuch larger role thanjust acting as afacilitator in the group’splanning. KCARD isalso very involved inthe implementation ofthe action plandeveloped and staysinvolved after the initialimplementation.

SPPI can be a very effective tool fora business to improve its operations, butthe SPPI requires a strong commitmentfrom the business’ management teammembers if it is to have a positiveimpact on the business’ bottom line.SPPI requires a series of working groupmeeting about six to eight weeks apart.

BMOA revealsstrengths, weaknesses

The Business Management andOperations Analysis (BMOA), acomprehensive study of a business’operations, is another support serviceoffered by KCARD that is growing inpopularity. Snell explains that theobjective of the BMOA is to providemanagement and the co-op owners andboard of directors with information andmaterials that will help in planning anddecisionmaking. During the analysis,the strengths, weaknesses, opportunities

Kentucky Center for Agriculture & Rural DevelopmentElizabethtown, Kentucky

Chaney's Dairy Barn near Bowling Green, Ky., has found successwith agri-tourism, inlcuding a giant corn maze, homemade icecreams and crafts. Debra Chaney (above) discusses the cornmaze with Kentucky Ag Commissioner Richie Farmer.

The Campbell County Beef Association (CCBA) is acooperative of beef producers who are jointly marketingnaturally grown “freezer” beef. CCBA incorporated as acooperative in the winter of 2010 and began operations early inthe summer of 2010. Kentucky Center for Agriculture and RuralDevelopment (KCARD) attended numerous meetings of thesteering committee, provided educational resources on the

cooperative business structure, assisted with drafting thearticles of incorporation and bylaws and developed acomprehensive business plan.

CCBA expects to market 50 head of beef produced by ninelocal farmers direct to local consumers this year. The co-ophas already asked KCARD for further assistance in developinga more comprehensive marketing plan in the near future. �

Campbell County Beef co-op members deliver processed beef to customers;it all starts with members’ herds grazing on rich Kentucky pastures.


and threats facing thebusiness are identified.At the end, KCARDstaff provides thebusiness withbenchmark materialsfrom which tomeasure progress andgrowth during the

next few years.“This is really a hands-on process,”

says Snell. “It is an intense, week-longstudy of the business’ operations.”

During the BMOA, KCARDinterviews key business personnel(board members, manager, and keystaff), members/owners, customers,suppliers and community leaders toidentify common themes in the businessoperations. KCARD also conducts adetailed investigation into the financialcondition, recordkeeping and legaldocuments of the business. A verbalreport is given to the business immedi-ately after the completion of the BMOAand is followed by a written report.

“A BMOA is an intensive processwhere you not only work with theclient, but also with their staff, suppliersand customers,” says Snell. “To makethe BMOA successful, it takes thecommitment of the business owners notjust during the evaluation, but toimplement recommendations once theanalysis is complete.”

Partnering for success“Over 70 percent of the

agribusinesses that KCARD has workedwith since 2002 are still in businesstoday, and many of them haveexperienced significant growth,” Snellsays, noting that these businesses createmany jobs.

Snell is quick to say that this successwould not be possible without theCenter’s board of directors and otheragriculture organizations thatcollaborate with it. “They are critical tothe daily operations and continuingsupport of the organization,” he says.Snell also points out that it would not

be possible to operate without thefinancial support provided by the RuralBusiness-Cooperative Service of USDARural Development and theAgricultural Development fundsprovided by the Kentucky AgriculturalDevelopment Board.

“We owe any success that KCARDhas had in working to grow andimprove our state’s rural economy tothese individuals and agriculturalpartners,” says Snell. “They deserve thecredit for any accomplishments thatKCARD has had in developingsuccessful, sustainable agribusinessacross our state.”

KCARD was incorporated as anonprofit in February 2001 by a groupof Kentucky agricultural leadersrepresenting the University ofKentucky, the Kentucky Council ofCooperatives, Kentucky Department ofAgriculture, Kentucky Farm Bureau,CoBank and others. �

Campbell County Beef Association

CO-OP MONTH

Taking Root

he Indiana CooperativeDevelopment Center(ICDC) is a nonprofitorganization founded in2003 to fill a void in

services for cooperatives in Indiana.The Center is committed to providing arange of innovative, results-orientedand cost-effective services tocooperatives and related organizations.

The Center provides technicalassistance and education to help start-up and emerging cooperatives across awide variety of industries. Drawing onthe skills and expertise of anexperienced and knowledgeable staff,ICDC has participated in thedevelopment and launch of cooperativeorganizations of all kinds, includingretail food cooperatives, communitysupported agricultural associations(CSAs), aquaculture, farmers markets,renewable energy, childcare andhousing, among others.

Four years ago, the Center hostedthe first Cooperative Summit inIndiana, which has been held annuallysince then. The mission of this day-longevent is to provide a forum fornetworking, to promote cooperativebusinesses and to increase opportunitiesfor cooperative business-to-businessrelationships. This year’s Summit isscheduled for Nov. 5 and will focus onthe theme of “communications.”

“We have a stellar line up ofspeakers,” says Debbie Trocha, ICDCexecutive director. Summit speakersinclude: Martin Lowery, executive vicepresident for external affairs with theNational Rural Electric CooperativeAssociation; Roberta MacDonald,senior vice president of marketing forCabot Creamery Cooperative; SusieHinkle, cofounder of Direkt Approach(a training and consulting company)and David Cain, president ofMediaSauce.

This year will mark the introduction


Indiana Cooperative Development CenterIndianapolis, Indiana

Laughery Valley Growers Cooperative (LVGC) in Batesville, Ind., serves as anaggregator of fresh fruits, vegetables and produce for its grower-members tosupply their Community Supported Agriculture (CSA) association. The CSA hasmany local subscribers around Batesville, but the primary customer base is inCincinnati, Ohio. A partnership with the Greater Cincinnati Healthcare Council(GCHC) and Christ Hospital, less than 50 miles away, helped increase the CSA’ssubscriptions.

Cooperative history:LVGC was formed five years ago by several area growers to better market

their produce. ICDC helped in the formation of the co-op and with directortraining. The number of grower-members continues to increase and thecustomer base has tripled since the early days.

As their partnership with the GCHC continues to grow, LVGC will need toincrease the number of growers to keep pace with the increase in CSAsubscribers. LVGC plans to form an educational arm to educate new subscribers,many of whom are from the urban sector, about co-ops. Due to the increase insubscribers, the LVGC is experiencing growing pains as it struggles to identifynew facilities for the packaging and processing of the food boxes for itssubscribers.

Impact on community/area:Now that the member-producers have a steady and growing demand for their

produce, these predominantly small farms have become economicallysustainable. The growing demand for local foods has also created a heightenedinterest among new and beginning farmers.

The local farmers’ market has highlighted the co-op and its success, which inturn has led to increased success for the farmers’ market. Increased consumerdemand for local foods has helped increase the viability and sustainability of the

region’s small farmers.“The Indiana Cooperative

Development Center has playeda significant role in the evolutionof our local initiative to empowerfamily farmers in our area tocreate direct markets for theirproduce,” says Sister ClaireWhalen, executive director of theLaughery Valley GrowersCooperative. �

Laughery Valley Co-opmeeting need for local food

Produce from the Laughery Valley Growers Co-op is boxed for delivery to its CSA subscribers.


of new awards thatwill be presentedduring the conference:the CooperatorCommunity Serviceaward and CooperatorHeroes award. “Wewant to recognize theoutstanding

contributions made by cooperators toboth their cooperatives and to theircommunities, says Trocha. Detailsabout the summit can be found at:www.icdc.coop orwww.indianasummit.coop.

Assistance from the ICDC has led tothe successful development and launchof a number of cooperatives in Indiana

which, in turn, have helped to anchorand improve the economic stability oftheir rural communities.

According to Trocha, “Thecooperative model is a sustainable formof business that empowers people andenhances the economic stability of thecommunities in which they operate andgrow.” �

CO-OP MONTH

Taking Root

Rural Electric and Telecommunications Development CenterMandan, North Dakota

he Rural Electric andTelecommunicationsDevelopment Centerserves all of rural NorthDakota by providing

technical assistance to emerging andexpanding cooperatives and mutuallyowned businesses. Hosted by the ruralelectric and telecommunicationscooperatives across the state, the Centerhas been operating since 1994. Itsmission is to: Add new wealth to theeconomy by creating, retaining andexpanding rural cooperatives and otherprimary-sector business enterprises.

Services provided:The staff works with farmers and

other rural residents to assist them withthe development of ventures such asagriculture processing facilities,manufacturing companies, ruralhousing, grocery stores and supplycooperatives. The Center staff guidesprojects through all the steps ofbusiness development, from start tofinish.

It provides assistance with:• Developing the organizationaldocuments;

• Fundraising for development work;• Completing feasibility studies;• Business planning;• Selecting qualified consultants;• Conducting equity drives;

• Developing finance packages;• Providing start-up administrativeservices.The Center also brings innovative

ideas to rural North Dakota byorganizing semi-annual RuralDevelopers’ Roundtable Talks. Theseevents feature an innovativedevelopment concept that can easily bereplicated in other rural areas, whileproviding rural developers and resourceproviders with an opportunity tonetwork.

Noteworthy endeavor:Many dairy farmers are being pushed

out of their current locations by urbansprawl. In response to a rapidlydeclining dairy industry in NorthDakota and a regional dairy processingcooperatives’ desire for a supply of

locally produced milk, the centerlaunched a program to help increase thenumber of dairy cows in the state. Thiswas accomplished by helping producers

expand their operation andby relocating displacedfarmers from other states toNorth Dakota.

Through this program,the Center has helped toattract six new dairy farmfamilies to rural NorthDakota. These families milk3,700 head that generate$26.9 million in milk salesannually — a criticallyimportant new source ofeconomic wealth for their

rural areas.

Quote from director:“As rural populations continue to

decline in North Dakota, morecommunities are seeking the assistanceof the Center to help them worktogether to provide for their area’sneeds, whether by organizingcooperatively owned grocery stores,housing or daycare centers. Throughour connections in the state’s economicdevelopment community, our Center ispoised to assist a wide variety ofbusiness development projects.” — LoriCapouch, Center Director �

Hayrides were part of a dairy social held at the recentlyexpanded Kenton Holle farm.

he NebraskaCooperativeDevelopment Center(NCDC) at theUniversity of

Nebraska-Lincoln is Nebraska’s centerfor cooperative-based businessesdevelopment. It provides education,training and technical assistance todeveloping and existing user-ownedbusiness — including cooperatives,limited liability companies (LLC) andother business structures. The Centeris committed to creating sustainablecommunities in Nebraska in whichpeople work together to meet theirneeds and reach their goals.

Among specific services offered are:strategic planning; group facilitation;access to outside professional services,such as legal and accounting services;assistance with feasibility studies;market analysis and business plandevelopment; financial projections andbudgeting assistance; projectmanagement; assistance withmembership development anddevelopment planning and training.

Center’s mission:To build a strong, engaged and

sustainable network of people withaccess to local, state and nationalresources; that is dedicated to assistingpeople in rural areas by helping themto work together to increase theirincomes via cooperative development,and to help facilitate value-addedopportunities.

Center goals:• Create and/or expand successfulgroup efforts, including cooperatives,that promote value-added agriculture,local food systems, renewable energyand “main street” businesses, as wellas other types of entrepreneurship;

• Increase cooperation and sharingamong producers, especially those


Nebraska Cooperative Development CenterLincoln, Nebraska

Staff members of Community CROPS (Combining Resources, Opportunities and People forSustainability) help grow healthy food on 16 community gardens around Lincoln. Photocourtesy CROPS

who are interested in exploringthe possibility of transitioningto a new type of agriculture;

• Provide customized andcontinuous service toorganizational groupsthroughout the life of relevantprojects;

• Facilitate and support favorablepublic policy by increasing theawareness of rural people’sneeds and the role of cooper-ative development.

Buy Fresh, Buy LocalNebraska

“Buy Fresh, Buy LocalNebraska” is an outreach andmarketing initiative to promoteand support local foods. Theinitiative began in 2006 aftermuch research by a group ofconsumers, farmers, nonprofitsand small local businesses thatwere seeking ways to benefit allNebraska communities.

The Buy Fresh, Buy LocalNebraska initiative includes

media outreach and public eventsto raise awareness of the benefitsof eating locally and the diversityof local food options available,and to increase the visibility andviability of a locally based foodsystem. Members of the effortinclude farmers, restaurants,institutions and groceries.

“Anyone who meets thecriteria is welcome to join,” saysNCDC Cooperative BusinessDevelopment Specialist ElaineCranford. “There's a place for


From early May through mid-October each year, more than10,000 shoppers visit the Omaha Farmers Market in the city’sOld Market for fresh produce, smoked meats, jams, gourmetbaked goods, flowers and everything else under the sun. It isone of dozens of farmers markets, CSAs (community supportedagriculture) and other local farm operations that are workingtogether under the marketing umbrella of Buy Fresh, Buy LocalNebraska (visit: www.buylocalnebraska.org for moreinformation).

Even chefs from nearby restaurants frequent the market tostock up on just-picked tomatoes, salad greens, berries andmore. Two Saturdays each month, they share their tricks-of-the-trade (and offer delicious samples) for customers in the

Everything under the Nebraska sun

CO-OP MONTH

Taking Root

The Omaha Farmers Market attracts more than10,000 shoppers annually.


market’s demonstration area.The market traces its roots back nearly 100 years, to a

farmers’ market that operated on the corner of 11th andJackson Streets. Until 1964, this was where growers came tosell everything from fruits and vegetables to herbs and honey.After a hiatus of 30 years, the Omaha Farmers Market wasrevived in 1994 on the very corner lot where the original marketthrived.

CSAs also join inAnother organization active in the “Buy Fresh” effort is

Community CROPS (Combining Resources, Opportunities andPeople for Sustainability), a community gardens project basedin Lincoln, which helps people work together to grow healthyfood and live sustainably.

Community CROPS, which started with one communitygarden in 2003, has grown to become an organization of 16community garden sites, a training farm, a successfulCommunity Supported Agriculture program and a regular standat the Old Cheney Road Farmers’ Market, among other efforts.It currently has five full-time staff positions, three AmeriCorpsmembers and numerous volunteers who help with projects, aswell as a group of farmers and gardeners.

“Our gardens provide the opportunity to share knowledge,educate, experience personal growth, and provide greenspaces for mental, spiritual and physical healing and well-being,” the group’s website says. “We are creating a resilientsystem where people can earn a living by feeding ourcommunity and conserve precious resources for futuregenerations.” For more information, visit:www.communitycrops.org.

Family farm direct marketingFarm families with their own direct marketing efforts are

also members of the Buy Fresh network, including Doug andKrista Dittman, owners of Branched Oak Farm. As thestewards of a 230-acre dairy farm 15 miles north of Lincoln,

Doug Dittman says “We take pride in knowing that ourproducts are made with sustainable, certified organic methodsand with a positive impact on the environment.

Branched Oak Farm, in the hills of eastern Nebraska knownas the Bohemian Alps, was started by Doug in 1991. When hemarried Krista in 1999, they began raising grass-fed beef andfree-range chickens. Customers began asking for milk, whichled them to buy some Jersey cows, build a dairy facility andstart milking.

They then joined forces with friends Charuth and Kevin Lothand stared making cheese. Charuth Loth had produced goatcheese under the ShadowBrook Farm’s Dutch Girl Creamerylabel, while Krista Dittman produced cow-milk cheese underthe Branched Oak Farm name. Through this collaborationcame Krista and Charuth’s own corporation: Farmstead FirstLLC, which NCDC provided technical and other assistance informing. Farmstead First, LLC Branched Oak Farm is now a fullyfunctioning, certified-organic, grass-based dairy specializing increating farmstead cheeses. �

everyone at the table...farmers,restaurants, groceries as well asfriends of Buy Fresh Buy LocalNebraska” (see sidebar). Thiscollaborative effort wasfounded by the University ofNebraska-Lincoln’s NebraskaCooperative DevelopmentCenter, the NebraskaSustainable Agriculture Societyand Great Plains RC&D.

The national partnerin the effort is the FoodRoutesNetwork, established in 1997

to foster and promote sustainable foodsystems in regions of the United Statesby using state-of-the-artcommunications techniques and publicpolicy innovations. In 2000,FoodRoutes Network became anonprofit, 501(c)(3) organizationfocused on having an impact on thepublic policy arena, generatingmarketplace opportunities andstimulating partnerships aroundsustainable food systems. There arecurrently 75 Buy Fresh Buy Localchapters in the United States. �

Krista Dittman and Charuth Loth with an array of theirspecialty cheeses.


Cooperative Development InstituteSouth Deerfield, Massachusetts


The CooperativeDevelopment Institute(CDI) provides

education, training, networking andtechnical assistance, includingorganizational development, feasibilityassessment, business planning, strategicplanning, marketing, communications,financial systems and board training.Clients are existing and start-upcooperatively structured enterprises inNew England and New York. Theseclients come from all business sectors:food, housing, energy, agriculture, arts,health, forestry, fisheries, retail andmore.

Center history:In 1994, a broad range of

cooperative leaders from theagricultural, telecommunications,worker-ownership and financial sectorswho shared a vision of a thrivingcooperative economy in the Northeastcame together to form CDI. TheInstitute has been a leader incooperative development in the regionand as an advocate that works withpartners throughout the country.

Noteworthy endeavor:At the 2010 National Cooperative

Business Association annual conference,“Co-ops Seeding Co-ops,” CDIpresented an analysis of the ways thatexisting cooperatives can meet moremember and community needs byinvesting in new cooperativeenterprises, through spin-offs, supply-chain management or diversification.

The presentation was inspired, in part,by CDI’s participation in thedevelopment of Maine Organic Milling.This effort involved the OrganicValley/CROPP Cooperative helping itsMaine dairy farmer-members topurchase and operate an organic feedmill as a farmer-owned cooperative (seesidebar). In the coming year, CDI plansto leverage its cross-sector co-opexpertise to bring multiple benefits tonew manufactured-home parkcooperatives in the region, includinghelping them to form energy and food-purchasing co-ops.

Impact on area:Since 1997, CDI has worked

intensively with well over 150 start-upand established cooperatives to launch

CO-OP MONTH

Taking Root



Maine Organic Milling in Auburn is a farmer ownedcooperative, organized in response to the closure of Maine’sonly organic feed mill.

“When the mill in Auburn stopped operations, it left manyMaine organic dairy farms with limited options,” says SteveRussell, an Organic Valley/CROPP Cooperative farmer-ownerand member of the Maine Organic Milling’s board ofdirectors. “As local, organic dairy farmers, it is essential toour businesses — and, frankly, to the survival of our farms —to source the highest quality organic feed for our animals atprices that keep us profitable. We need this feed mill right inour own backyard. Our cooperative model and the attitude ofbanding together is what made this come together.”

Discussions among farmers began in June 2009 aboutwhether it would be feasible to buy and operate the formerBlue Seal feed mill. These talks were joined by a team ofresource people, including: cooperative specialists from theCooperative Development Institute and USDA RuralDevelopment; a business counselor from the Small BusinessDevelopment Center at the Androscoggin Valley Council ofGovernments; an agricultural business management specialistfrom the Maine Department of Agriculture; an agriculture andreal estate business consultant; and the farm resourcesmanager from Organic Valley/CROPP Cooperative.

Together, farmers and their advisors worked though thecomplex feasibility study, business planning, organizationaldevelopment and financing needed to leverage thecommitment and capital to buy the mill. Papers to seal thedeal were signed in January 2010.

Along with member equity, the new cooperative received

financing assistance in the form of donations and preferredstock purchases from supporting organizations, as well asloans from the Maine Rural Development Authority and theAgricultural Marketing Loan Fund. The co-op is partneringwith Organic Valley/CROPP for ingredient sourcing, inventory,technical support and logistics.

“The relationship between Maine Organic Milling andOrganic Valley represents a unique cooperative partnership,”says Lowell Rheinheimer, CROPP’s farm resources manager.“It offers an example of two cooperatives cooperatingtogether for mutual benefit in fulfillment of their commonmission.”

Maine Organic Milling, or MOM, began selling high-quality,competitively priced complete organic dairy concentrate inMay 2010. It didn’t take long for rave reviews to come backfrom the initial buyers. Dairy producers reported that cowstook to the new feed very well and maintained goodproduction.

Surprisingly, the butterfat and protein components of theirmilk shot up even as their cows spent more time on pasture,compared to past years. Since dairy producers get paidaccording to their milk components, they are a happy bunch.

Indeed, “this new cooperative business is happy news forall Maine’s organic livestock and poultry farmers,” says LyndaBrushett of the Cooperative Development Institute. “As theiroperations evolve, these farmers will have access to locallymilled and mixed feeds and to grain farmers, who will have anew market.” �

Milling co-op crucial to Maine’s organic dairy farms

Opposite page: Bill Andrews Jr., left,delivers a load of organic grain toMaine's first organic feed mill, wherehe is met by Gregg Varney. Left: JasonJordan of Lewiston loads a truck.Photos by Daryn Sloven, courtesy SunJournal


new businesses,expand existingoperations andaddress criticalbusiness issues. Thesecooperativescollectively servemore than 10,000

members; employ more than 150people (not counting their contributionto the livelihood of many smallproducers); strengthen the region’s localfood system; expand clean energychoices and provide good homes andjobs.

CDI’s vision is to help promote “a

cooperative economy centered on aninter-dependent, dense network ofenterprises and institutions that meettheir members’ needs throughprincipled, democratic ownership; theywill care for the community, combatinjustice and inequity and promoteconscious self-governance.” �

CO-OP MONTH

Taking Root

Montana Cooperative Development CenterGreat Falls, Montana

ervices Providedand Area Served:

The MontanaCooperative Devel-opment Center

(MCDC) provides cooperativeeducation and project management;assists with feasibility studies, businessand marketing plans; provides assistancein the development of articles ofincorporation and bylaws; and providesclients with access to local, state andfederal funding sources. It also analyzesresources, assesses project eligibility,structures financial packages anddevelops applications. MCDC, whichcovers all of Montana, offers grantwriting assistance and provides directfinancial assistance for legal costs.

MCDC history:Since its inception in 1999, MCDC

has provided hands-on, cooperativeeducation and project managementassistance to 123 entities. It hasmanaged and directed 44 feasibilitystudies and managed and directed 58business and marketing plans. TheCenter has also provided legalassistance to 41 projects, providedfinancing for 37 projects and provided21 entities with applied research. TheCenter has provided training for 75projects and guided the formation of 34cooperatives.

Noteworthy projects:Linx Regional TransportationCooperative

Linx Regional TransportationCooperative was formed to maximizethe use and integration oftransportation resources to close servicegaps through the creation of a tri-state(Montana, Idaho and Wyoming) busservice. The cooperative’s service areacovers more than 73,992 square miles,which includes many under-servedareas. Because of the vast area, itrequired a well-coordinated planningeffort involving several entities.

The cooperative has engagedinterested riders, stakeholders andpublic and private transportationproviders in Idaho, Montana andWyoming, as well as statetransportation officials and federal landmanagement agencies.

The co-op will provide:• A trip planning and ticketing system

with multiple customer touch-points;• Improved marketing of existing andemerging services;

• Coordination of route schedules andtransfer points;

• Innovative technology applicationsthat benefit both transportationoperators and their riders;

• A centralized location for informationon all modes of mobility.The project area encompasses 28

counties in Idaho, Montana andWyoming that surround Yellowstoneand Grand Teton national parks.Presently, it has 20 members with aprojected impact of $10.8 millionannually, providing 197 jobs in 28counties in three states.

Riverside CrossingThe senior housing cooperative

model is new to Montana. Housingavailable to seniors has generally comein the form of assisted living, low-income housing or nursing homes. Thecooperative model offers an opportunityfor seniors looking to “downsize” to befree of yard work and other homemaintenance. The cooperative modelalso offers a way to build an affordablehousing complex, allowing seniors tostay in their community – which isimportant for maintaining theeconomic stability of rural Montanacommunities.

Riverside Crossing, Montana’s first

The Linx Regional Transportation Co-op isattempting to improve bus service in threestates.

ervices providedand area served:The Value AddedAgriculture Develop-ment Center (VAADC)

uses a “hands-on” approach forproviding technical and executiveservices to new and existing agriculturalbusinesses across the state of SouthDakota. Consultation with cooperatives,entrepreneurs and organizations resultsin an individual work plan from the

Center’s menu of available services,which include: project management,feasibility assessment, businessplanning, education, funding access,applied research and networking. TheVAADC also provides educationaloutreach opportunities to heighteninterest and awareness of cooperativeand agribusiness development.

Center history:VAADC is a not-for-profit

organization formed in 1999 by acontingency of 17 rural-based agri-cultural commodity groups, trade or-ganizations and co-operatives com-mitted to providing entrepreneurs andbusiness owners with assistancenecessary to help rural cooperatives


housing cooperative for active adultsage 55 and over, offers a uniqueretirement opportunity in thecommunity of Hamilton, in the middleof a broad valley banked by theBitterroot Mountains to the west andthe Sapphire Mountains to the east.Riverside Crossing is an affordablealternative to homeownership, completewith tax benefits, community oversight,economic security and the eliminationof interior and exterior homemaintenance.

Last Chance Café Co-opHaving at least one good café or

restaurant can play a critical economicand social role in keeping a small ruralcommunity viable. So when theprevious owners closed the only café inSunburst, Mont., about 18 months ago,it sparked an effort to reopen it undernew ownership. Sunburst is a smallcommunity on Interstate 15, about 10miles from Canada. It is the last placeto stop to get something to eat formany miles, hence the name: LastChance Café.

MCDC worked with a steeringcommittee from the community ofSunburst, and the café has reopened asa cooperative. The café created threefull-time jobs in an area where everyjob is needed. More workers could be

hired in response to wind-powerdevelopment in the area, some of whommay look for a place to get a good,home cooked-style meal. A cateringbusiness may also be launched to servejobsites where workers don’t have thetime to drive into town for meals.

“It may seem trivial to some to talkabout a project that creates only threejobs,” says Brian Gion, MCDC’s chiefexecutive officer. “But, we also have tolook at the impacts it brings to theother businesses in the area. Whenpeople stop and eat, they may also filltheir vehicle with gas or shop at otherstores.”

Midwife Co-opUnderscoring the broad scope of co-

op projects MCDC is working on —and the flexibility of the co-op businessmodel — the Center is also in theprocess of forming the MontanaMidwives Cooperative. It plans to opena birthing center that provides qualitychildbirth care in Northwest Montana.There is a demand for safe, professionalcare from qualified staff from those whoare seeking an alternative to a hospitalfor childbirth. This co-op will helpmedical entrepreneurs, nurses andmidwives) to start their own businessand increase their earning potential.The co-op will create up to10professional positions.

Quote from Center CEO:“To stabilize our rural communities

and keep them thriving, we need tomaintain and build our basebusinesses,” says Brian Gion, MCDC’schief executive officer. “These are localbusinesses that provide the necessitieswhich keep our rural communitiesfunctioning. Without a strong base,communities cannot survive, cannotgrow and cannot attract new businesses.The cooperative business model hasprovided opportunities to maintain andgrow businesses in Montana.”

To find out more about MCDC, goto: www.mcdc.coop or call 406-727-1517. �

Service with a smile: the staff of the LastChance Café co-op.

Value Added Agriculture Development CenterPierre, South Dakota The South Dakota Oilseed Processors plant.


grow and prosper.The VAADC isestablished as thestate’s “go to” placefor customized servicedelivery of supportstemming fromtesting the concept tocarrying out business

development phasesthrough accomplishing online companyexpansions.

Noteworthy projects:South Dakota Oilseed Processors is a

state-of-the-art oilseed expeller facilityproducing high-quality natural oil andmeal products. The VAADC assistedwith various business developmentaspects resulting in commencement ofplant operations in December 2008. Itis currently supporting a proposedexpansion into a multi-feedstockprocessing facility by collaborating withthe cooperative to outline strategyoptions and develop a business plan.

The $17 million project employs 40people and uses 4.1 million bushels of

locally grown soybeans. Additionally, itis spurring economic growth ofancillary businesses in surroundingsmall communities.

VAADC also provided support forNatural Gold LLC, a soy-oil processorthat opened in Aberdeen in 2008. Theplant has the capacity to crush 5 millionbushels of soybeans annually. Thechemical-free, soybean crush processused by Natural Gold lends itself tomultiple applications. The refined, all-natural vegetable oil is available for usein products for human consumption,livestock feed, industrial and technicaluses, as well as renewable fuels.

Some of its soy oil is being used formaking Dakota Ag Additive, which thecompany says can be blended withethanol and biodiesel for enhancedengine performance and mileage. Soymeal, a co-product of the productionprocess, is made into a high-valuelivestock feed ingredient for areaproducers.

VAADC provided technicalassistance to foster the businessdevelopment, teamed up with the

Governor’s Office of EconomicDevelopment to use the Value AddedAg Subfund to help fund a feasibilitystudy and collaborated with the RegionIII Small Business Development Centeron developing financial projections forthe business plan.

Quote from board president:“Agriculture is the foundation of

South Dakota’s economy. The supportof our agricultural community andUSDA’s Rural Cooperative Develop-ment Grant program allows theVAADC to provide services needed tostart and grow cooperative businesses inour rural communities,” says VAADCboard president Merlin Van Walleghen.“Delivery of VAADC services hasplayed a significant role in starting orexpanding more than 130 endeavors.Our client base will continue to grow asour resources assist the next phase ofvalue-added agriculture that includesnot only traditional commodities, butalso co-product processing, newcommodities, global markets andincreased entrepreneurialism.” �

CO-OP MONTH

Taking Root

Keystone Development CenterYork, Pennsylvania


Keystone Develop-ment Center (KDC)serves Pennsylvania,

Maryland, Delaware and New Jersey. Itprovides a “one-stop shop” forcooperative development services.These include feasibility studies,incorporation, bylaw development,business plans and conflict resolution.

Center history:The Keystone Development Center

is in its 11th year of operation and isapproaching a cumulative total of 100clients who have been providedsignificant technical assistance in

support of their cooperative. TheCenter’s nine-member board representsorganizations such as Adams ElectricCooperative, Pennsylvania StateUniversity Extension, PennsylvaniaAssociation for Sustainable Agricultureand the Center for Rural Pennsylvania.One of KDC’s greatest strengths is itsinvolved, “hands-on” board, which iscommitted to cooperative developmentand whose members have a broad rangeof expertise.

The Center provides completedevelopment services and regularly doesfeasibility studies and business plandevelopment. Feasibility studies havebeen conducted for nearly 40 groups.

Lancaster FarmFresh Cooperative

The Lancaster Farm FreshCooperative (LFFC) serves Amish andMennonite farmers in the Lancaster,Pa., area and is considered one of theCenter’s greatest success stories. Startedby seven farmers, the co-op has grownto more than 50 farmer-members. Theco-op’s high-quality, mostly certifiedorganic products are marketed inPhiladelphia and New York City,among other locations.

Cooperative sales have grown fromabout $300,000 in its initial year ofoperation in 2006 to well over $6.5million in 2010. The KeystoneDevelopment Center helped LFFC


incorporate, develop bylaws and hireemployees. The co-op currently haseight full-time employees and isconducting interviews to hire twoadditional full-time workers. It alsoemploys five full-time or seasonaldrivers and about 10 part-time officestaff and warehouse packers.

Two spin-off businesses of the co-ophave also been created: a truckingcompany and a co-packing business.Several farms have become certifiedorganic operations based onmembership in LFFC. As a result of thecooperative, the farmer-members haveseen a significant increase in their netfarm income.

The development of the cooperativehas made a tremendous impact on thefarmer-members economic viability. Tolearn more about the co-op, visit:www.lancasterfarmfresh.com.

Quote from Center director:“Lancaster Farm Fresh is an

excellent example of the power ofcooperation. The farmers who helpedform LFFC and those who joined laterare able to access markets and to earnprices that would have been impossiblewithout cooperation.” — Cathy Smith,KDC Executive Director �

One of the newest initiatives KDC is involved with is the MidAtlantic FoodCooperative Alliance (MAFCA). MAFCA represents the beginning of what ishoped will grow into a federated cooperative of food co-ops in the region. Thiseffort is aimed at developing the local food system by organizing the consumerend of the food system by helping them more easily find sources of localproducts.

The group has met several times and currently has 30 member-cooperativesinvolved. These food cooperatives have an estimated total membership of about43,000 individuals or households, with current aggregated gross sales of nearly$99 million (this does not include the projected sales from the start-up co-ops). Itis estimated that MAFCA members are already purchasing $16 million of localproducts annually.

The current membership includes 12 start-up businesses, most of which KDChas been advising throughout their launch process. These start-up businesseshave already benefited a great deal from exposure to mature co-ops in MAFCA.

The objectives of the Alliance are to:• Establish a regional network of consumer food co-ops, businesses and farmers;• Promote a marketing brand for regional co-ops;• Publicize, promote and enhance resources for established and start-up co-ops;• Promote the principles and values of the cooperative movement.

The group has selected a steering committee and currently has four workgroups: Food System Development, Regional Network, CooperativeEconomy/Education/Marketing and Start-ups. �

MidAtlantic Food Cooperative

Produce from Lancaster Farm FreshCooperative members, including DavidFogarty-Harnish (left), has proven tobe a hit with consumers in New YorkCity and Philadelphia. Below: About 30food co-ops, with $99 million in annualsales, have formed a federated co-op:the MidAtlantic Food Cooperative.

CO-OP MONTH

Taking Root

desire to supportregional economicdevelopment andlocally grown food —coupled with a

reduction of small- and mid-sizedgrocery stores — has fueled growth ofcooperative food stores in California.Interestingly, rural communities andinner cities are the locales for thisresurgence of food co-op development.California’s inner city “food deserts”and rural communities both havetrouble attracting mid-sized grocerystores that offer a variety of freshproduce and foodstuffs.

Historical overview:California’s first cooperative (the

United Workingman’s Boot and ShoeManufacturing Co.) was formed in 1867in San Francisco. The ConsumerCooperative of Berkeley, the state’smost prominent food cooperative,started in 1937 and opened twoadditional stores during the depressionyears. During the 1960s and 1970s,CCB grew to include 12 stores servingvarious cities just outside of the SanFrancisco Bay area.

In the 1970s, a second wave ofindependent food co-ops grew aroundCalifornia. This wave included ruralcommunities such as Quincy, GrassValley, Chico, Humboldt and Arcata.

These rural food co-ops are not onlystill standing, but thriving, as strongcooperative businesses.

Despite these “waves” of cooperativedevelopment, there were no newconsumer food co-ops formed between1985 and 2000. Also during that time,the Consumer Cooperative of Berkeleydissolved in bankruptcy. This chilledany prospective cooperative organizer’szeal for initiating a new food co-op.

As memory of that failure faded, newinitiatives throughout California,Nevada and the Pacific Northwest are

gaining momentum and generating athird wave of cooperative development.

Resurgence of cooperativedevelopment

The third wave of cooperatives istaking shape in many of the same waysas their first and second wavepredecessors. Some are using existingresources, some are starting out as foodbuying clubs using 21st century tools,such as the Internet and software tools,while others are pioneering newstrategies. In each case, cooperative


Californiaexperiencingsurge infood co-ops

Coffee time at the Arena Market and Café in Mendocino.

The California Center for Cooperative Development (CCCD) promotescooperatives as a vibrant business model to address the economic and socialneeds of California’s communities. CCCD fulfills this mission by:• Educating the public, community institutions and government agencies to foster

and promote the understanding of cooperatives;• Identifying and disseminating information about successful practices and

models for cooperatives;• Encouraging cooperation and coordination among various types of

cooperatives;• Providing technical assistance and education for the development of

cooperatives to best address economic and social needs. �

California Center for Cooperative DevelopmentDavis, California

development is responding tocommunity desires, such as afundamental need for a grocery storewith fresh, healthy food or to makelocally produced foods accessible and

create a sustainable local economy.During 2009, two new California

food cooperatives opened their doors,and at least four more cooperatives arein the development process. One of thenew co-ops is Mandela Foods Cooper-ative, a worker-owned co-op in adesignated “food desert” in Oakland,which saw its major supermarkets leavethe area throughout the 1980s and1990s. The cooperative also benefitsrural farmers through its concertedeffort to purchase from minorityfarmers in the Salinas Valley and FresnoCounty.

The co-op works closely with

Mandela Marketplace, a charitablenonprofit that assists the communitythrough a host of community programsthat have a healthy foods theme,including links with local farmers.

The second new food cooperative,Arena Market and Café, sits on thecoast of Mendocino, a beautiful,rugged, and isolated community.Without a grocery store for more than40 miles in any direction, the residentsup and down the nearby coast ralliedwith their committed memberships andmember loans to establish thecommunity co-op in a renovatedbuilding on the main road whereHighway 1 runs through town. Thestore reaches out to local farmers byfeaturing their produce and products.

CCCD’s Lake County effortThe California Center for

Cooperative Development (CCCD) hasbeen helping rural residents in LakeCounty strengthen their buying cluband prepare a feasibility study for aretail food cooperative. Lake County isa rural area that is home to the largestlake entirely within the state. The 50-mile, two-lane road that runs aroundthe lake creates access challenges ofmany kinds.

The core members of the buyingclub (which has about 200 totalmembers) were burdened by the size

and breadth of the club. CCCD helpedlink members to the Internet and usesoftware programs that were adaptedfrom the Oklahoma Food Co-op by co-op consultant Roy Gusinger, who hasalso been working with similar food-buying clubs across the PacificNorthwest.

The board of the buying club isreviewing a recently completedfeasibility study to evaluate whether it isthe right time to develop a retail foodco-op.

Other food cooperatives currently indevelopment are divided among urbanand rural areas. One rural endeavor isattempting to retain a valued localnatural food store that will likely closewhen the owner retires. CCCD andother food cooperatives in the regionare helping the steering committee withthis cooperative development process.Another urban endeavor has beenreceiving telephone advice and referralsfrom CCCD.

Recent development projects aredrawing on lessons from the failures ofprevious cooperatives, the best practicesof successful co-ops, and the resourcesof cooperative developmentprofessionals. These resources are moreessential in today’s climate than theywere in the past. — By Luis Sierra andKim Coontz (CCCD staff members) �


Ohio Cooperative Development CenterPiketon, Ohio

ervices providedand areas served:

The OhioCooperativeDevelopment Center

(OCDC) enhances rural economicdevelopment in the Appalachian andother rural areas of Ohio and west-central West Virginia, as well as forsome multi-state and nationwidecooperatives. OCDC has beenproviding technical training and

support for new and emergingcooperatives since 2000 at the OhioState University South Centers (OSU-SC). OSU-SC is strategically locatedwithin rural Appalachia, which providesmaximum integration with the targetedgeographic areas and audiences.

OCDC is also well-positioned towork closely with all programs based atOSU-SC and statewide with theExtension Service in providing a strongnetwork for clients.

OCDC is integrated with the OSU-SC Business Development Network,which provides services that include abusiness incubator, one-on-onetechnical assistance, training/workshops and a network of resourcesto help business owners andentrepreneurs. The team operates theregion’s Small Business DevelopmentCenter and Manufacturing andTechnology Small BusinessDevelopment Center. The personnel of

James Bell rings up a food purchase at theMandella Food Cooperative, a worker-ownedco-op in Oakland.


the BusinessDevelopmentNetwork providevaluable technicalassistance infinancing, marketingand management.

Center history:From 2007 to 2010, the

OSU-SC Business DevelopmentNetwork assisted 1,448businesses/clients with one-on-oneassistance. Some 227 training sessionswere conducted, which attracted morethan 2,500 attendees.

During this same time period,OCDC assisted in the legalincorporation of 16 cooperatives, eight501(c)(3) business and one limitedliability company. OCDC accomplishedthis by investing more than 4,560 hoursof directed client services, whichincluded more than 610 face-to-facesessions with 68 potential new/emerging cooperatives. OCDC staff

provided 48 presentations/workshopsfor more than 1,591 participants.

Impact on area:The businesses assisted acquired

nearly $19.5 million in loans and

invested $12.7 million in equity. Grosssales of these businesses exceeded $18.8million, which includes $5.47 million ingovernment contracts. The Center saysthese businesses retained 510 jobs andcreated 540 new jobs. These businessesalso received more than $1.4 millionfrom Ohio’s Internship Program, whichoffset half the wages of technology-based interns.

Quote from director:“From 2000 to 2010, OCDC has

worked closely with many agencies andcommunity partners to achieve itmission.” — Tom Worley, Director, OSU-SC �

CO-OP MONTH

Taking Root

The United Regional Purchasing Cooperative (URPC) is apurchasing/marketing partnership between the South CentralManufacturing Network Inc. (SCMN), in Chillicothe, Ohio, andBenefit Unlimited Inc. (BUI), in Marietta, Ohio. It contractswith vendors for core-business supplies and services, as wellas for employee benefits.

SCMN was formed in 2007 to provide training andpurchasing services for its 10 members, which are localmanufacturers with more than 7,000 employees. Skilled-tradeand “soft-skills” training was the first service provided bySCMN. Its second major effort was to provide preferred-vendor purchasing services for members involved in bothmanufacturing and non-manufacturing businesses. Thiscooperative service leverages the power of numbers, helpingto obtain best prices.

As a major local preferred vendor, Benefits Unlimited Inc.(BUI) was selected as a contractor. BUI was formed in 2007to provide cost-effective healthcare benefits and to promotea consumer-driven approach to healthcare with a systemthat addresses most of the current healthcare issues.

The cooperative business structure addresses some ofthese challenges and gives patients and physicians more of a

voice in the system. After the pilot project in Ohio, it is hopedthat the effort can be expanded nationwide as BUI developsmulti-state infrastructures.

SCMN and BUI went “live” with URPC services in May2010. Since then, new URPC membership applications havebeen received, representing more than 500 small businessesand 2,000 employees.

The cooperative saved $1.1 million in annual healthcareplan premiums for one company that employs more than 200employees. The co-op saved a small chamber of commercemore than $10,000 in annual premiums for its threeemployees. Many businesses are currently in the process ofreviewing this option for their employees.

It is estimated that URPC will save up to $5 millionannually for its members.

“The United Regional Purchasing Cooperative is making asignificant difference in reducing operational costs for ourmembers and making an impact on the businesses’ bottomline,” says Tom Markley, SCMN board president. �

Purchasing cooperative provides savings for members

Horizon communications and Adena healthservices are both members of the SCMNpurchasing co-op. Horizon recently received a$66 million grant under the federal BroadbandTechnologies Opportunity Program (BOTP) toextend and enhance broadband service to 34counties in southeastern Ohio. Photo courtesySCMN


La Montañita Food Co-opAlbuquerque, New Mexico

roducts orServices:Retail groceries andwholesale delivery ofnatural, organic and

local foods with two stores and adistribution facility in Albuquerque, onestore in Santa Fe, N.M., and one storein Gallup, N.M.

Number of membersand annual sales:

More than 15,000 members; annualsales of $27 million.

Co-op history:La Montañita Co-op Natural Foods

Market was incorporated in 1976, whenit had about 300 member-ownerfamilies. The co-op added a secondstore in 1999, added two additionalstores in 2005 and warehouse in late2006.

Noteworthy innovation or newendeavor:

In late 2006, after much study andthe creation of a strategic business plan,La Montañita Co-op embarked on aCo-op Trade/Food-Shed Project. Thisproject is designed to provide farmers,ranchers and value-added producers amuch needed wholesale outlet for thedistribution of their products. It servesa 300-mile radius around Albuquerque.

Impact oncommunity/area/famers:

The Food-Shed Project was anuntested idea; there was no priorbusiness model to use as guidance. Infour years of operation, the Food-ShedProject and the 7,000-square-footCooperative Distribution Center(CDC) have increased the number oflocal producers served from about 300

to nearly 700. The co-op’s storescurrently carry more than 1,100 localproducts in all grocery categories,which comprise 20 percent of its localpurchases and sales.

Quote from board member:“We have unique challenges serving

the fifth largest state with a smallfacility and communities separated byhundreds of uninhabited miles. I’m veryproud of our staff — despite manychallenges they have achievedsignificant progress in the development

of local foodproduction. —Martha Whitman,Board President �

Editor’s note: The National CooperativeGrocers Association (NCGA) is a businessservices cooperative for natural food co-opsthroughout the United States. Its 114independent co-op members operate morethan 145 storefronts in 32 states withcombined annual sales of nearly $1.2billion. NCGA helps unify natural food co-ops, optimize operational and marketingresources, strengthen purchasing power and,ultimately, offer more value to co-op ownersand shoppers.

A noteworthy trend in recent years hasbeen the growing cooperation and alliancesbetween food co-ops, farmers markets andlocal/regional farmer’s co-ops. In observanceof Co-op Month, NCGA selected the twoco-ops featured on the following pages asexamples of outstanding, member-ownedfood stores.

La Montañita Co-op Natural Foods launched the Co-op Trade/Food-Shed Project to help farmerssuch as Tomas Apodaca (above) of Tijeras, N.M., and the state's cherry farmers (below).


The Marquette Food Co-op (MFC), in Marquette, Mich., is an organicand natural retail food cooperative that also serves as an informationhub for “all things food.” The co-op has about 2,500 members and isgrowing, predominantly in Marquette and Alger Counties of Michigan’sUpper Peninsula. MFC had 2009 sales of $3.6 million and will top $4million in sales for 2010.

Founded in 1971 as a natural foods buying club for a few families,MFC grew into a small storefront that was run by one paid staffmember and some volunteers throughout the 1990s. Eventually, thestore became a full-service organic and natural grocery store andjoined National Cooperative Grocers Association. It expanded into itscurrent store, which has 3,200 square feet of retail space. The co-opemploys 26 full-time and 16 part-time staff.

Noteworthy innovation or new endeavor:Lower Michigan is known nationwide for its agricultural abundance,

but farming contributions made by Upper Peninsula farmers areoverlooked, due to its geographic remoteness.

MFC stepped in to give Upper Peninsula farmers the recognitionthey deserve. By publishing the Upper Peninsula Farm Directory,sponsoring farm tours, assisting farmers’ markets, carrying local foodin its retail store, creating a communication network among farmersand cultivating relationships with diverse businesses and organizations,the Marquette Food Co-op has given the area’s farmers a venue forselling their goods and a voice in Michigan’s agricultural community.

Simultaneously, MFC runs an outreach department that educatesUpper Peninsula communities about healthy eating, nutrition and theeconomic benefits of “buying local.” The co-op has positioned itself asthe driving force behind a vibrant local food network in the UpperPeninsula.

Impact on community/area:MFC provides a market for locally grown and produced goods,

financially supports five area farmers’ markets and fills a retail gap fororganic and natural food. Through itspayroll and purchases of local goods,the co-op accounts for at least $1.5million in annual economic impact in thisrural and economically struggling areaof Michigan.

MFC provides employment,promotes agricultural expansion,entrepreneurialism and communityownership of a thriving business. In 2009,in the midst of a severe recession, MFCpaid $60,000 in patronage to itsmembers.

“Beyond providing access to healthy foods, the Marquette Food Co-op serves to ‘connect the dots’ of a whole and vibrant local foodsystem in an area previously dependent on food imports,” says MattGougeon, MFC general manager. �

State CenterAL Federation of Southern Cooperatives �

http://www.federationsoutherncoop.comAK University of Alaska Anchorage Center for Economic

Development � http://ced.uaa.alaska.edu/

CA California Center for Cooperative Development �www.cccd.coop

CO Rocky Mountain Farmers Union CooperativeDevelopment Center � http://www.rmfu.org/co-op/

IN Indiana Cooperative Development Center �http://icdc.coop/

IA Iowa State University � www.isucoops.org

KY Kentucky Center for Agriculture and RuralDevelopment � http://www.kcard.info/index.php

MA Cooperative Development Institute �http://www.cdi.coop

MI Michigan State University / Product Center forAgriculture & Natural Resources � http://www.aec.msu.edu/product/index.htm

MT Montana Cooperative Development Corporation, Inc.� http://www.mcdc.coop

MT Mission Mountain Cooperative Development Center� http://www.lakecountycdc.org/mission-mountain-coop-development-center.html

NC North Carolina State University � [email protected]

ND North Dakota Association of Rural ElectricCooperatives � http://www.ndarec.com/aboutUs.htm

ND Common Enterprise Development Center �http://www.cooperationworks.coop/about/members/common-enterprise-development-corporation

NE Nebraska Cooperative Development Center �http://ncdc.unl.edu

OH Ohio Cooperative Development Center �http://ocdc.osu.edu

OH Kent State University OEOC Ohio EmployeeOwnership Center � http://www.oeockent.org/

OH National Network of Forest Practitioners �http://www.nnfp.org/index.php

PA Keystone Development Center, Inc. �www.kdc.coop

SD Value-Added Agriculture Development Center �http://www.sdvalueadded.coop

VA Virginia Foundation for Agriculture, Innovation &Rural Sustainability � http://www.vafairs.com

WA Northwest Cooperative Development Center �http://www.nwcdc.coop

WI Cooperative Development Services �http://www.cdsus.coop

Co-op builds community around foodCo-op Development Centers

Aleut Hatfield helps with hisfamily's produce stand at theMarquette Co-op's annualopen house.


Extension Service website to include co-op education area

By Lynette SpicereXtension News Coordinator

rofessionals from state CooperativeExtension services, industry and USDA arecollaborating to provide a new, web-basedsource of educational information aboutcooperatives. The team is using wiki software

— which allows users to collaboratively create and edit webpages using a web browser — to write and reviewinformation about cooperatives. The team is working toimprove and expand the available resources and to reach newaudiences with information on cooperatives.

The platform being used is eXtension, an educationalpartnership of 74 land-grant universities that providesresearch-based information and learning on one website:www.eXtension.org. eXtension complements the “on-the-ground” work of the nationwide Cooperative Extensionsystem.

eXtension resource areas are created by “communities ofpractice” that contribute content in Mediawiki, the samesoftware that Wikipedia (an online encyclopedia) uses. A wikiis a website that allows the creation and editing of interlinkedweb pages using simple “mark-up language.”

An eXtension community of practice is a virtual networkof faculty, professional and para-professional staff, county andregional educators, industry experts and federal governmentrepresentatives with expertise in a given subject matter —cooperatives, in this case. They share knowledge througheducational articles, programs and electronic interactions.eXtension facilitates peer review

Phil Kenkel, director of the Bill Fitzwater CooperativeCenter at Oklahoma State University and a member of thecooperatives eXtension community, notes having peersreview information before it’s published on the web is animportant component of eXtension.

“eXtension is a well-respected national forum that allowsus to increase the visibility of the cooperative business modeland gives people looking for information confidence in theeducational materials they find,” says Madeline Schultz ofIowa State University and a co-leader for the cooperativescommunity of practice.

The leadership team hopes its work will have an impact inthree areas:• More citizens will value and use the cooperative businessmodel;

• More youth will be engaged as cooperative businessesmembers, employees, board directors and managers;

• Communities will achieve greater economic and socialimprovements.Cooperatives on eXtension will launch on Oct. 5, during

the USDA National Cooperatives Month celebration inWashington, D.C., with six content areas: 1) basiccooperative principles; 2) cooperative development; 3) youthand cooperatives; 4) management and marketing; 5)cooperative finance, and 6) board of director strategy.

60 communities of practice involvedeXtension has nearly 60 communities of practice, more

than half of which have published content on the website.Each community of practice develops articles and frequentlyasked questions and hosts an “ask an expert” section, acalendar of events and news. eXtension was launched in early2008 with 16 resource areas. Today, eXtension has more than200,000 unique site visitors each month.

The cooperatives community of practice is working tomaximize public outreach about cooperative principles andfunctions. It is also sharing decision tools, case studies andother research-based information. “Our audience is broader,and interest in cooperatives grows, when economic times aretough,” says Brian Henehan of Cornell University. “People

eXtending Co-op Knowledge


Farm fields and classrooms are traditional settings for the work of Extension Service agents, but its expertise will now also be available on a newwebsite designed to promote understanding and use of cooperatives. Photos courtesy Cornell Cooperative Enterprise Program


By Stephen Thompson, Assistant Editor

alifornia’s wine country isn’tthe first place you’d look tofind a biodiesel operation.But in the town of Temecula,a new cooperative has begun

operating with the goals of providing localfarmers and vintners with ways to cut energycosts and add value to their products, whilesimultaneously advancing the development ofalternative energy sources.

Promethean Biofuels cooperative may berelatively modest in size, but it is the largestbiodiesel operation on the West Coast.Unlike most other biodiesel production co-ops, the co-op members include farmers,restaurants looking for an outlet for wastecooking oil, consumers and even people whowant to make their own biodiesel (but need alittle help).

The co-op was starated by local

entrepreneur Todd Hill. He started thecooperative after his previous business, anelectronics-recycling firm employing 60people, went out of business.

“I wanted to encourage the developmentof alternative energy sources, create marketsfor local farmers and create employmentwithout having to maximize short-termprofits at the expense of long-termsustainability. And I also wanted to encourageother people who want to expandopportunities.”

The cooperative is named afterPrometheus, the titan of Greek mythologywho stole fire from the gods to give tohumans, and was then chained to a rock.

The facility began running in April with acapacity of 2.25 million gallons per year. Hillsays that the plant is designed to be profitablerunning at about half that pace, giving the co-op a bit of leeway for expansion. Currently,it’s producing at a rate of about 1.5 million

Todd Hill, holding a sampleof the co-op's biodiesel,says goals of the co-opinclude developingalternative markets forlocal farmers and creatingemployment opportunities.Photos courtesyPromethean Biofuels

Biofuel Prometheus

Like its namesake,Promethean Biofuels

hopes to better mankindwith new source

of energy


gallons per year, using restaurant greaseand oil from other local sources.

“Right now, the availability offeedstock is our limiting factor,” hesays. W ith a large number of vintners inthe area, H ill sees grape seed as apotential major source of feedstock,which would give wine growers a newvalue-added source from a byproduct.Both employees and customers aremembers of the cooperative, whichoperates on a full-service, business-to-business model. O il is purchased fromproducer-members and collected fromrestaurants — which are also members— and finished biodiesel is madeavailable for their operations at asubstantial discount from market ratesfor petroleum diesel.

M embers onlyO nly members may buy the co-op’s

products, and they receive a share ofany profits. T he cooperative also usesits market power to supply ingredientsof production — such as methanol andcaustic chemicals — at a discount to“home-brewers,” members who preferto produce their own biodiesel. T he co-op also provides an outlet for them tomarket their surplus.

T he main byproduct of biodieselproduction, raw glycerin, can be aproblem for small producers to disposeof. T he co-op can also take care of that.

Technical help is also available fromthe co-op. An in-house laboratoryprovides research and developmentservices to members. H ome-brewersdealing with fuel-quality problems canalso get help. All such assistance is freeto members.

T he cooperative bylaws recognizethree kinds of members: founders, whoinvested a total of $500,000 towardstart-up costs; employee-members; andconsumer-members. Employees vote toestablish work rules. Wages, hiring andpromotions are overseen by H ill, in hisposition as manager.

C onsumers pay $50 annually fortheir shares in the co-op. T he bylawsgive them voting rights on issuesaffecting distribution of the product.

Founder-members have limited inputinto management decisions until theircontributions have been repaid.

T he board of directors consists ofthree of the five founders, H ill (as themanaging principal) and an open spotfor an attorney. H ill wants to see thefounders paid back with a “reasonable”return on their investment.

H ill says that most of the consumer-members are actively involved inrunning the cooperative beyond theroles laid out by the bylaws. “T hey'reenthusiasts,” he says. “T hey enjoyhelping the cooperative to succeed.”T he cooperative structure allows forregular distribution of profits to theconsumer-members, as well.

Grow er-membermakes ow n biodiesel

O ne of those consumer-members isIsaac M oore, the proprietor ofM orningstar Ranch. M oore growsgrapefruit, avocados, persimmons andorganic produce for local retailers. H emakes his own biodiesel using a 200-gallon reactor and used oil collectedfree from local restaurants.

M oore buys his methanol and causticchemicals from the cooperative at adiscount. H e says he finds the co-op’sglycerin-disposal service very helpful.“It works really well,” he says.

H e’s exploring the idea of growinghis own oilseeds as a winter crop, whichthe cooperative would crush for him toextract the oil. “I'm looking forward toexpanding our relationship. You know,you don’t go into business, you growinto it.”

H ill would like to see Promethean’sfull-service approach expanded intowhat he calls “full-circle integration.”

“We have local restaurants that makea point of supporting local farmers,” hesays. “I'd like to see the cooperativesupply cooking oil to the restaurants ata discount brokered by the co-op, thencollect the used oil to make biodiesel,some of which would be used by thefarms to run their equipment. T heprofits would be distributed to themembers.” H e says that some major

fast-food chains already use a similarsystem.

T he cooperative is currently workingtoward meeting the certificationrequirements of both the ISO 9000standard — which addresses productquality and meeting customer needs —and the ISO 1400 standard, which setsenvironmental performance goals.

“W hen we’ve got thosecertifications,” he says, “they'll supportcontinuity in the organization when wehave personnel changes. We’ll have afoundation of standards that’ll help usmaximize value to our members.”

Launch problemsG etting the cooperative up and

running posed special problems,including more legal and regulatoryissues than he had imagined, as well ashis own inexperience in the field.

“Biodiesel has been around for 100years,” he says, pointing out thatRudolph D iesel originally saw hisinvention as allowing farmers to growtheir own fuel. “I thought that it wouldbe something you could set up like aM cD onald’s. After all, they were doingthis kind of stuff in the 1940s duringthe war.”

In fact, he discovered that eachbiodiesel plant is unique, with abewildering number of variablesaffecting the final design. “T hat reallyaffected our budgeting,” he says. “Wewent over budget by maybe 150percent.”

Although the city of Temeculaagreed to accelerate the granting ofpermits, challenges still cropped up.Plans had to be approved by the firedepartment and environmentalstandards also had to be met. T heexpiration of the federal tax credit formanufacturers of biodiesel is anotherconcern, although H ill says theoperation can survive without it.

“We have to get out of the ‘build’mode and into the ‘how do we serviceour members’ mode,” he says.M eanwhile, the co-op is looking formore members who want to be part ofthe biodiesel movement.


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

Co-op developments, coast to coast

Northwest Dairy merges withCountry Classic Dairies

Northwest Dairy Association,Seattle, Wash., and its marketingsubsidiary, Darigold Inc., haveannounced a merger with CountryClassic Dairies, a Montana dairycooperative. Under the agreement,approved by the members of both co-ops, current Country Classic memberswill become part of Northwest Dairy.

The two businesses noted that theyhave a long, cooperative workingrelationship. Country Classic at onetime even used the “Darigold”trademark on its products.

Formed in 1932 as Gallatin ValleyCreamery Cooperative, Country Classicbegan by processing cream into butterin Bozeman, Mont. The co-op’s 33members produce between 13 and 14million pounds of milk per month,representing about 55 percent of thestate’s milk supply. Its Bozemanprocessing plant will now become aDarigold plant.

“Combining the two businessoperations, especially given thehistorical relationship between the twocooperatives, will benefit all parties,”says Northwest Dairy AssociationPresident and CEO John Underwood.“We will be able to provide our newMontana member-owners with a securemarket for their milk while maximizingits value.”

Northwest Dairy Association isowned by more than 500 dairyproducers. Its members ship 7.2 billionpounds of milk annually from farms inWashington, Oregon, Idaho, NorthernCalifornia, Utah and now Montana. ItsDarigold subsidiary operates 12

processing plants throughout theNorthwest for its dairy farm families.

Co-op community mournspassing of Rod Nilsestuen

Rod Nilsestuen, one of the nation’smost respected cooperative leaders, diedJuly 21 in a swimming accident in LakeSuperior. At the time of his death,

Nilsestuen, 62, was Secretary of theWisconsin Department of Agriculture,Trade and Consumer Protection.

“We are saddened to learn of thepassing of Secretary Nilsestuen,” U.S.Agriculture Secretary Tom Vilsack said.“He was a tireless advocate for thefarmers and ranchers of Wisconsin andprovided steady leadership and guidanceduring a time of great challenge.”

Wisconsin Governor Jim Doyle

called Nilsestuen “a warm, humorousand wonderful husband, father andfriend. Under his incredible leadership,Wisconsin has seen the greatest andmost beneficial transformation ofagriculture in generations.

“Among many otheraccomplishments,” Doyle said, “Rod’slegacy includes dramatic increases in

milk and cheese production,dynamic growth in organicfarming and grazingoperations, protecting ourstate’s farmland through theworking lands initiative,promoting the developmentof biofuels and bioenergy togenerate homegrownrenewable energy inWisconsin, connectingconsumers to local farmersthrough the ‘Buy Local, BuyWisconsin’ program andstrong support forinvestments in America’sDairyland.”

Nilsestuen was electedto the National CooperativeHall of Fame in 2003 and wasthe founding chairman of theNational Rural CooperativeDevelopment Task Force. He

won the Cooperative Builder award in2007 from the Wisconsin Federation ofCooperatives and led the effort to unifythat organization with the MinnesotaAssociation of Cooperatives, a task thatbegan in 1998 and was finalized in 2004(the name was changed to CooperativeNetwork in 2009).

“The State of Wisconsin and thecooperative business movementnationwide have lost a leader whose

Rod Nilsestuen


contributions will live on through thepeople and institutions grown andstrengthened by his work,” CooperativeNetwork President and CEO BillOemichen added. “It would be hard toname an individual more responsiblethan Rod Nilsestuen for the vision andfocus that have energized and unifiedcooperatives in Wisconsin andMinnesota. The member co-ops ofCooperative Network and theirmember-owners have all benefited fromhis single-minded commitment.”

Nilsestuen helped create theWisconsin Milk Marketing Board, theWisconsin Corn Promotion andSoybean Marketing Boards,Cooperative Development Services, theCenter for Dairy Profitability,Wisconsin Rural Leadership Programand the Midwest Dairy MarketingInitiative.

Growmark reportssales of $6 billion

Growmark, Bloomington, Ill., hadestimated sales of $6 billion for its fiscalyear ending Aug. 31. Senior VicePresident of Finance Jeff Solberg saidthe co-op had net income of about $81million.

“Fiscal 2010 was another good yearin a series of good years,” Solberg said.“The result of this strong performanceis a very strong balance sheet with asound equity base built on a substantiallayer of retained earnings. Thisminimizes the stock investmentrequired of members, which issupplemented by a prudent level oflong-term debt.”

An estimated $55 million inpatronage refunds will be returned toGrowmark member cooperatives.• Agronomy/Seed Divisions — ThePlant Food Division staged a strongcomeback after a relatively weak prioryear. Gross income is the secondhighest on record, and volumerebounded significantly from 2009 asprices declined and product becamemore affordable for farmers. TheCrop Protection Division had a thirdconsecutive strong year, and the SeedDivision will pay patronage for the

fifth year in a row.• Energy Division — This divisionsaw volume increases for all products,with propane volume reaching nearly310 million gallons, an all-timerecord.

• Grain Division — The co-op madesignificant investments in its retailgrain business, which produced $800million in sales and pretax income of$16 million. All four retail grain unitswere profitable.

• Facility Planning and SupplyDivision — This unit expanded itsscope and offerings in 2010, withheavy demand for bulk-seedinstallation and many new farm andcommercial grain dryers. Grain binsales and construction continued at astrong pace, as did sales of facilityequipment products.

• Retail Operations — Growmark’sretail supply business segmentenjoyed another good year, producing$1 billion in sales and $18 million inpre-tax income.“Change has been the strategic

theme for this decade,” Solberg said.“More change has occurred in thisdecade than in any other in our history,and that change has produced recordlevels of success and profitability for theGrowmark System.”

Florida Farm Creditassociations pursue merger

The boards of directors of Farm

Credit of North Florida and FarmCredit of Southwest Florida haveapproved a merger with Farm Credit ofSouth Florida, effective Dec. 31, 2010.The associations are in the process ofobtaining regulatory approval of themerger from AgFirst Farm Credit Bankand the Farm Credit Administration. Ifthose approvals are received, a member-borrower vote on the proposed mergeris expected to occur in late October,with results reported in November.

In a letter to members, the boardssaid the merger would result inadvantages from greater risk-bearingcapacity due to a larger capital base,improved loan portfolio diversification,enhanced operating efficiencies and agreater ability to attract and retain keyteam members. No branch officeclosings are anticipated and reductionin staff will be minimal, the letter said.The three boards have also agreed on aplan to downsize the number ofdirector positions after a merger, butare committed to assure regional andagricultural commodity representationon the new board.

Don Rice, the current CEO of FarmCredit of South Florida, will serve asthe CEO of the merged association.Both Charles Thompson, CEO of FarmCredit of North Florida, and JimmyKnight, CEO of Farm Credit ofSouthwest Florida, have announcedtheir intent to retire at year-end aftermany years of Farm Credit service.

Growmark’s Agronomy/Seeds Division sales were the second best on record last year,helping the co-op return $55 million in patronage to its members. Photo courtesyGrowmark


Farm Credit launchesnew website

Farm Credit has launched a national,online presence at the FarmCredit.comwebsite. It has also revitalized itsnational giving and sponsorshipprogram, and established a dedicatedcommunications team to buildawareness of Farm Credit and itsunique mission. While Farm Credit hasserved rural America for nearly acentury, the launch of FarmCredit.commarks the system’s first centralizedonline resource.

Visitors to the website can: find localFarm Credit System associations;research and apply for Farm Creditcareer opportunities; apply for grants orsponsorships through Farm Credit’s $2million national contributions program,and access photos and videos aboutFarm Credit, among other features ofthe website.

Farm Credit is a borrower-ownedcooperative system that was createdthrough an Act of Congress in 1916. Itis comprised of nearly 90 specializedfinancial service organizations that helpmore than a half million Americanfarmers, ranchers and agribusinessesproduce food, fuel and fiber.

Biofuels not a majorfood price factor

The National Biodiesel Board saysthat a recent World Bank reportindicates that production of biofuels isnot having a big impact on food priceincreases. “Biodiesel plays an importantrole in cutting greenhouse gasemissions and reducing our dependenceon fossil fuels. Attempts to perpetuate amyth of ‘food vs. fuel’ are invalidated asthe World Bank identifies energy costsas the true price-driver,” NationalBiodiesel Board CEO Joe Jobe says.

The recent report, “Placing the2006/08 Commodity Price Boom intoPerspective,” drastically reducesestimates of the impact of biofuels oncommodity prices, he notes. WorldBank economists now say that initialestimates were too high and that “thispaper concludes that a stronger linkbetween energy and non-energy

commodity prices is likely to be thedominant influence on developments incommodity, and especially food, mar-kets.” The report also points out thatbiofuels only account for about 1.5 per-cent of global grains and oilseeds use.

Jansen to lead Blue DiamondMark Jansen has been selected as the

new president and CEO of Blue

Diamond Growers, the Sacramento,Calif.-based almond growers’cooperative. He will succeed DougYoungdahl, who is retiring at the end ofthis year after a decade at the helm ofthe co-op. Jensen is scheduled toaddress the cooperative’s grower-ownersat their centennial annual meeting inSacramento on Nov. 18.

Jansen was most recently presidentof Schwan’s Food Service Inc., adivision of the Schwan Food Co., basedin Marshall, Minn. The family-ownedfrozen foods company employs 22,000people in 50 countries worldwide. Priorto joining Schwan, he worked forPillsbury Co., Edison Brothers StoresInc. and General Mills.

“Mark brings to Blue Diamond aunique understanding of retail andconsumer brands,” says BoardChairman Clinton Shick, an almondgrower from McFarland, Calif., and a27-year veteran of the board. “He led aprofitable turnaround of the SchwanFood Service Division and is a proven

brand-builder who influencedsubstantial growth for Haagen-Dazs,Betty Crocker, Totino’s, Pillsbury, RedBaron, Freschetta, Wolfgang Puck,Tony’s and Minh.” Jansen received anMBA degree in marketing and financefrom the Kellogg School of Business atNorthwestern University.

“In addition to pure, unadulteratedbrand strength, our ability to open newmarkets, develop new products andfoster enduring customer partnershipsare strengths that will ensure BlueDiamond’s global reach remainsunmatched in the industry,” saysYoungdahl.

Blue Diamond is owned by morethan half of California’s almondgrowers. The crop is worth anestimated $3 billion annually.

Swiss Valley acquires FaribaultDairy; Forms cheese venturewith Swiss firm

Swiss Valley Farms Cooperative,based in Davenport, Iowa, has acquiredFaribault Dairy Co., in Faribault, Minn.The sale includes Faribault's bluecheese manufacturing facility and itsline of branded cheeses, the most

Mark Jansen

Amablu is a cave-aged blue cheese thatis now part of the Swiss Valley Farmsfamily of products.


popular of which is Amablu,a cave-aged blue cheese.

“This acquisition marks asignificant step in our effortsto grow in the blue cheesecategory,” says Don Boelens,CEO of Swiss Valley Farms.The Faribault facility willallow for an immediateincrease in blue cheeseproduction and serve as anexcellent companionoperation to Swiss Valley’sother blue cheese plant inMindoro, Wis., he notes.

The sale brings togetherthe history, talent andresources of two of America’smost experienced blue-cheese makers, Boelnes says.“It promises to be a goodmarriage,” adds Jeff Jirik, oneof the owners of FaribaultDairy. Jirik, who will take ona new role as vice presidentof the co-op’s Blue Cheese Division,believes becoming part of the SwissValley Farms family is the best way tocontinue the legacy of the Amablubrand. The acquisition is part of a long-term plan to expand the focus on retailbranded cheeses, including SwissValley's Mindoro brand.

In another move to strengthen itsposition in the cheese market, SwissValley and Emmi-Roth Käse USA haveannounced the creation of White HillCheese Co. LLC, a joint venture thatwill manufacture cheese in Shullsburg,Wis. The Shullsburg site has beenowned by Swiss Valley Farms since2005.

The joint venture will allow the twoentities to increase production of BabySwiss, No-Salt-Added Swiss and othercheese varieties. Capital improvementsat the site are underway, with cheeseproduction expected to begin inFebruary, 2011. The new plant isexpected to employ about 30 people.

Farmers market numbers soarThe number of U.S. farmers markets

jumped 16 percent in 2010, from 5,247in 2009 to 6,132, according to the

National Farmers Market Directory(using USDA data), which reports thegreatest surges in the Midwest. Thereare 886 farmers markets open duringthe off-season. This is the first yearUSDA has tracked winter markets.

“Seeing such continued stronggrowth in the number of U.S. farmersmarkets indicates that regional foodsystems can provide great economic,social and health benefits tocommunities across the country,”Agriculture Secretary Tom Vilsack said.“Farmers markets provide fresh, localproducts to communities across thecountry while offering economicopportunities for producers of all sizes.”

Farmer Co-op Conferencein Colorado, Dec. 6-7

For over a decade, agriculturalcooperatives have looked to the FarmerCooperatives Conference as a sourcefor innovative thinking about currentcooperative issues and trends. Thisyear’s conference theme is:“Cooperatives: Looking Forward.”The conference will be held Dec. 6-7 atthe Omni Interlocken resort inBroomfield, Colo., (between Denverand Boulder).

Sessions will examine current trendsaffecting the business of agriculturalcooperatives. Presentations and paneldiscussions will include:• An update on the global economy andthe economic, legislative and policyimplications for agriculturalcooperatives;

• A closer look at the domestic legallandscape and the issues that havebeen raised around agriculture andantitrust enforcement;

• Innovative financing, joint venturesand a global scope as strategies forgrowth;

• Sustainability in the food industry, itsrole in future profitability andpossible cooperative competitiveadvantages.The conference provides a unique

opportunity to learn and exchange ideaswith CEOs, cooperative directors andothers doing business with agriculturalcooperatives. Visit www.uwcc.wisc.edu/farmercoops10 for conference programupdates, online registration and links tothe conference hotel website. Forquestions about the conferenceprogram, contact Anne Reynolds at

Dallas Tonsager (at podium), under secretary for USDA Rural Development, hosted leaders from a broadcross-section of cooperatives in July for a series of roundtable discussions on the future direction forUSDA’s Cooperative Programs office. The recommendations are being weighed for possible futuredirections for the agency, which supports cooperatives with educational materials (including thismagazine), research, statistics, co-op development and technical assistance. USDA photo by BobNichols



from the sawmills — and is turning aprofit — by collecting tree bark andother tree remains from the region’sparks. This is certainly a great exampleof an FMC creating an environmentalbenefit.

There are social, as well as economicand environmental reasons, for forminga farm machinery-sharing co-op. FMCsunobtrusively cut through the obstaclesof isolation and create a network ofassistance. They can become gatheringplaces for members and incubators for

the exchange ideas. They can result inneighbors lending a hand to each othermore often, and to sharing usefulinformation or contacts amongmembers.

When you’re part of an FMC, youdon’t have a choice: you need to talk toeach other, make compromises onequipment-use scheduling and berespectful and responsible toward othermembers of the co-op. It’s a learningprocess that is part of a member’spersonal development and which alsoserves the group as a whole. The FMCcan respond to other needs that haveyet to be met within the community.

Obviously, this increases everyone’squality of life.

Most of these comments could alsoapply to any other cooperative, becausecooperation means sharing. Let’s berealistic, sharing a mill or a hardwarestore is great, but in terms of memberproximity, sharing farm machinery takesus into another dimension ofcooperation. It requires a very strongcapacity to practice cooperation on adaily basis. That is the challenge to bemet by some 1,750 member-farmers inour FMCs when the sowing seasonbegins each spring. �

Canadian farmers see benefitscontinued from page 12

are looking to cooperatives to stimulatethe economy or meet needs.”

People coming to the eXtensionwebsite to learn about the cooperativebusiness model will have various levelsof business and communitydevelopment knowledge. A ruralelectric cooperative member, forexample, may want to know what makesan energy cooperative different from aprivately owned power supplier. Aboard member in that same ruralelectric cooperative may be seekingbetter understanding of strategicplanning processes and implementationmethods required to meet future energyneeds.

CHS Foundation supportingeffort

The cooperatives community ofpractice received a $25,000 start-upgrant from the CHS Foundation. “CHSand the CHS Foundation have a longcommitment to cooperative educationand value the ongoing collaborationamong industry, the USDA andacademia,” says William J. Nelson,president of the CHS Foundation.Many universities, programs andindividuals are providing in-kindservices and travel expenses.

eXtension’s cooperatives team is co-chaired by John Park from TexasAgriLife Extension Service andMadeline Schultz from Iowa StateUniversity Extension. Leadership teammembers are: Brian Henehan from

Cornell University; Chris Petersonfrom Michigan State University; PhilKenkel from Oklahoma StateUniversity; Gregory McKee fromNorth Dakota State University, andDixie Watts Dalton from VirginiaPolytechnic Institute and StateUniversity.

Michael Duttweiler from CornellUniversity is the evaluation leader andElizabeth Gregory North, of TexasAgriLife Extension Service, is thecommunications leader. John Wells,director of co-op development forUSDA Rural Development, is thenational program leader. Edward Smithfrom Texas AgriLife Extension Serviceand Mary Holz-Clause from Iowa StateUniversity Extension are theadministrative advisors. �

eXtending Co-op Knowledgecontinued from page 35

[email protected] or (608)263-4775.

Co-op testimony stresses needfor trade programs

Programs that promote agriculturalexports put money in the pockets ofAmerica’s farmers and help boost thewider U.S. economy, says Brent Roggie,general manager and chief operatingofficer of National Grape Cooperativeand a board member of the National

Council of Farmer Cooperatives(NCFC). Roggie’s remarks cameduring a Senate Agriculture Committeehearing to examine U.S. agriculturaltrade policy and the 2008 Farm Bill’strade title.

“Farmer cooperatives across thecountry give farmers a vehicle to markettheir products and compete in a globalmarketplace,” Roggie testified. “Theearnings from these sales are returnedto the farmer-owners as patronagedividends and help to provide market-based income from beyond the farmgate. USDA export promotion

programs, such as the Market AccessProgram (MAP) and the ForeignMarket Development Program, play avital role in helping farmers and theirco-ops capitalize on these opportunitiesoverseas.”

Roggie said National Grape’sgrowers have used the MAP program toincrease the co-op’s exports to Japan by46 percent in three years. Roggie saidWelch’s juice is now on the shelves of92 percent of Japanese food retailers.�

Newslinecontinued from page 41

“members” — then discuss how todistribute the earnings and retire stock.

To teach one of the co-op principles— Concern for Community — FarmersUnion encourages the youth tocontribute their profits to a charity oftheir choice. Each recommendation ismade by motion, open for debate, andthen voted on.

Even “co-op kids” benefit“Though my father has worked for

both Cenex and Farmers Unioncooperatives for years, without myexperience at Farmers Union camp, Iwould not have understood the basicstructure of what makes a co-op sounique,” says Stephanie Barnhart ofNorth Dakota. “My favorite part of our

camp store is that the members literallyown the co-op. This fact allows me tosay, ‘this is my business.’”

“One of the most important andfavorite aspects of our leadership campsis the co-op store,” adds Sonny Harrell,education director for MontanaFarmers Union. “This allows thecampers to become acquainted withcooperative principles and businessmethods.”

These camp co-ops are organized allacross the nation every summer atjunior and senior camps sponsored byFarmers Union. The focus oncooperative education is not surprising,considering that Farmers Union’ssymbol is a triangle comprised of thewords: “Education, Cooperation,Legislation.”

The general farm organization’sfounders were leaders in forming creditunions, rural electric cooperatives andfarm supply and marketing

cooperatives. This included the FarmersUnion Central Exchange and FarmersUnion Grain Terminal Association thatwere forerunners of Cenex and HarvestStates, which merged to become CHSInc.

Farmers Union has a long andstoried history of developing andpromoting cooperative businesses.Annually, the general farm organizationalso presents a conference oncooperatives in Minnesota’s Twin Cities.The event attracts college ag studentsand their instructors.

Barnhart says teaching campers toopen their own co-op store encouragesyouth to discuss the principles ofcooperatives and the value of a unitedmembership. “The pride I have inowning something collectively with somany other members definitelyinfluences me to do business at co-ops.”

To learn more, go to www.nfu.org. �

Look Who’s Minding the Storecontinued from page 13


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