D4-Lanc«ster Farming, Saturday, March 4, 2000 New Generation Cooperatives One Way To ‘Grow’ Farm Income SALT LAKE CITY, Utah-New generation coopera tives (NGC) are offering oppor tunities for farmers and ranchers to create new sources of income by adding value to crops and livestock. Though these cooperatives are structured differently than “traditional” cooperatives, their success depends on if they allow for participation by producers who have limited resources, and if producers keep control of the business decisions. Cooperative specialists shared their experiences and observa tions about NGCs with dele gates attending the 98th annual convention of National Farmers Union (NFU). In Colorado, 225 wheat farm ers raised $5 million to buy a bakery. The new co-op, Moun tain View Harvest, makes bread and has doubled the bakery’s sales. Dave Carter, president of Rocky Mountain Farmers Union, said NGCs such as Mountain View Harvest require high equity investments but offer higher returns as com pared to traditional co-ops that favor a low-investment, low return business structure. Carter said it takes highly motivated people to organize successful projects such as Mountain View. It takes about three years to develop a co-op from concept to operation, so or ganizers need to have patience. Also, organizers need to resist the temptation to “adjust” fi- We Now Accept Visa Lancaster Farming 1 E Main St Ephrata, Pa 17522 717-394-3047 or Lititz 717-626-1164 FAX 717-733-6058 PHONE HOURS Mon, lues, Wed & Fn Sam to 5 p m Thurs 7am to 5 p m OFFICE HOURS Mon thru Fn Sam to 5 p m The following categories are available for your classified advening In Section C Thursday morning at 9 of each week s publication 1 - Farm Equipment 1b - Speciality Farm Eq 2 - Farm Eq Wanted The following categories are available for your classified advertising in Section D Deadline Wednesday afternoon at 5 of each week s publication la-Construction Equipment 3- and Unloaders 4- and Supplies 5- Equipment 6- Equipment 7- Equipment 8- Ba-Exotic Animals 9- & Mules 10- & Goats 11- 12- Breeding 13- Eq & Supplies 14- & Supplies 14a-Ratites 15- & Seed 16- 17- 18- & Vegetables 19- 20- 8. Garden 21- Oflered 22- Work 23- Wanted 24- Wanted 25- Opportunities 26- 27- 28- 29- 30- 31- 32-Miscellaneous 32a-Antiques 33- Vehicles 34- 35- & Trailers 36- Estate nancial projections during the feasibility studies in an attempt to make a cooperative cash flow. NGCs require the best man agement available in order to succeed. Organizers need to budget accordingly, Carter said. Capitalization needs to be ade quate for the business plan. At the same time, the investment plan should allow for participa tion by members who have lim ited financial resources, he said. Communication is vital, he said. “Every start-up coopera tive is going to through rough times,” he said. If shareholders are kept in the dark, they will revolt, threatening the long term success of the co-op. James Matson, a co-op devel opment specialist for the U.S. Department of Agriculture, said NGCs are structured differently as well. Membership in an NGC is closed rather than open. Also, stock equity is tied to delivery fights with an obligation to de liver. Finally, stock can be trans ferred to other producers, and stock value may appreciate or depreciate. In some newer value-added cooperatives, one share of stock may also include the opportu nity, and responsibility, to deliv ery one bushel of wheat or other commodity to the co-op. Agreeing with Carter, Matson said the control of the co-op must remain with the producers who serve on the board. And these co-ops must find a way to allow producers of limited means to participate. CLASSIFIED AD ORDER BLANK { LANCASTER FARMING } NOTE: Please do not use this form for Mail Box Market Ads, see instructions with Mailbox Markets. Name Address City Zip Please publish my ad times starting with the DEADLINES: SECTION D - WEDNESDAY AT 4:00 P.M. SECTION C - THURSDAY AT 9:00 A.M. OF EACH WEEK’S PUBLICATION MINIMUM $ LINES 1 TIME COST $6.91 4 Lines 7.88 5 Lines 9.85 6 Lines 11.82 7 Lines 13.79 8 Lines 15.76 9 Lines 17.73 10 Lines 19.70 Add’t Per Line $1.97 Each “The people who most need this access often don’t have it,” he said. NGCs may require from 30 to 50 percent equity up front. “If it’s a good project you can usually find the financing,” he continued. Organizers need to be open to the idea of entering a partner ship with a competitor to attain the co-op’s goals. For perspec tive, it cost a minimum of $5O million a year to establish a brand name. Another considera tion is that the competition isn’t going to stand idle while they lose market share to an upstart cooperative. Matson said NGCs should keep their unallocated retained DAUPHIN (Dauphin Co.) -Individuals, families, and or ganizations are invited to the Dauphin County Conservation District’s Annual Awards Ban quet Thursday, March 23. The conservation district will honor individuals and/or groups for their outstanding contribu tions to the conservation of our natural resources. This special event will begin at 6:30 p.m. in the auditorium of the Dauphin County Agriculture and Natural Resources Center in Dauphin. The evening will begin with a buffet dinner of turkey and ham. Following the meal, an awards ceremony will recognize such in dividuals as the 1999 Outstand ing Conservation Educator and 'iiHiimf VISA State Phone (, issue. Classify under I enclose ADS MUST BE RUN 3 TIMES IN A ROW TO RECEIVE ANY PRICE BREAK IN ORDER TO GET THE CORRECT COST, PLEASE USE ONLY ONE LETTER PER SPACE WITH A BLANK SPACE BETWEEN EACH WORD Dauphin , Master Card PLEASE WRITE CLEARLY PAX 717-733-6058 earnings to a minimum. The end goal is to return more income to the members. According to Kyle Vickers, deputy director of the Missouri Department of Agriculture, NGCs need to focus on market ing, as “consolidation and con centration is also there in the retail industry.” It will be diffi cult for value-added coopera tives to place products on store shelves. State governments can do more to help producers form co operatives. Missouri allows up to a $15,000 tax credit on a $30,000 investment in a co-op. Missouri has become more aggressive in Sets District 1999 Outstanding Conservation Farmer. The feature presenter for the evening is the award-winning wildlife artist Ken Hunter, who will be presenting the program entitled ‘Research of a Wildlife Artist.” This entertaining and educational one-hour slide pro gram explores the fieldwork of the artist, writer, photographer, and lecturer. The slide show fea tures photos and stories of Penn sylvania black bears as the artist worked with Dr. Gary Alt, re search biologist for the Pennsyl vania Game Commission. The program will also include a hu morous encounter with approxi mately 200 hogs from a local farm. As a certified SCUBA diver, CALL 717-626-1164 TO ADVERTISE YOUR LINE AD OR DISPLAY BOX AD IN OUR PAPER □ Check Enclosed □ Visa (13 or 16 numbers) □ Mastercard (16 numbers) (Be sure to include all numbers) □ Discover (16 numbers) Card # Exp. Date: Box Replies: Ads with answers coming to a box number, c/o Lancaster Farming: $1.50 per ad per week additional. This newspaper will not be responsible for more than one incorrect insertion of any advertisement. providing cooperative develop ment tools to farmers and ranchers. The need for value-added co operatives is more pressing as farm income continues to slide. Jeff Moser, NFU’s director of economic and co-op develop ment, said production expenses have risen from 60 percent of gross cash receipts in 1950 to more than 85 percent in 1990. Yet the farmer’s share of the food dollar has dropped to less than 23 percent, and continues to spiral downward. Value added cooperatives allow farm ers and ranchers to recapture a larger share of the food dollar. Banquet Ken also photographs and sketches underwater. In addi tion, he also mixes paint under water to assure accurate color. The slide program will feature these unusual and at times hu morous underwater ventures. Tickets for the banquet are available from the Dauphin County Conservation District. The cost is $12.50 for adults, $6 for children 3-8 years old, and free for children under 3. Dead line for purchasing the tickets is March 16. For more information, con tact the conservation district office at (717) 921-8100. & Discover Signature mms. Add’t Line @ 3.94 OWES RATE StIMES t > 3 LINES 22.08 15.76 19.70 27.60 23.64 33.12 27.58 38.64 31.52 44.16 35.46 49.68 39.40 55.20 Add’t Line @ 5.52
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