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HomeMy WebLinkAbout972573.tiffRDCI-IY mounTRin vi L-9 T'T Tn r0.! 2O av 9: 07 FERRTERS union � �}� COLORADO, NEW MEXICO, WYOMING 10800 EAST BETHANY DRIVE • 4TH FLOOR • AURORA, COLORADOr 0 632 •:- IONE 303/752-5800 • FAX 303/752-5810 1u Ii;C _.-.. November 14, 1997 Mr. George Baxter Chair Board of County Commissioners P.O. Box 758 Greeeley, CO 80632 Dear Mr. Baxter: The Rocky Mountain Farmers Union Cooperative Development Center is pleased to inform you that a US Department of Agriculture Rural Cooperative Development Grant was awarded to the Center. This successful application will allow the Center to provide technical assistance and other resources for cooperative development projects. Working with other Centers around the country and the CLUSA Institute for Cooperative Development, the Rocky Mountain Center will work directly with producers to add value to raw commodities while adding jobs and income to rural communities. We can share ideas and disseminate information on best practices for the development of cooperatives. Thank you for your support of our grant proposal. Enclosed is a press release describing the funding received by this Center and others around the country. We are excited to have the opportunity to continue our work and to build on our past successes. We will keep on working with new groups of producers and on new value-added possibilities. Enclosed is a report on some of the past years projects and a summary of the grant proposaL If you are aware of producer or community groups that might benefit from the advantages a cooperative could provide, please give them our name and ask them to get in touch. We appreciate your continued interest in the work of the Rocky Mountain Farmers Union Cooperative Development Center. Sincerely, David E. Carter Enclosures //Valor 7 972573 ROCI4Y mounmin FRRmERS union COLORADO, NEW MEXICO, WYOMING 10800 EAST BETHANY DRIVE • 4TH FLOOR • AURORA, COLORADO 80014-2632 • PHONE 303/752-5800 • FAX 303/752-5810 SUMMARY OF COOPERATIVE DEVELOPMENT PROJECTS ASSISTED BY THE ROCKY MOUNTAIN FARMERS UNION COOPERATIVE DEVELOPMENT CENTER Updated as of August, 1997 Mountain View Harvest Cooperative Mountain View Harvest Cooperative emerged from the rubble of a grain marketing and feed milling cooperative that was forced into bankruptcy in 1988. Several farmers associated with that cooperative felt that a new cooperative could successfully be developed to conduct some type of value-added processing. In May 1994, the small group of farmers met with Dave Carter, RMFU President to discuss potential steps available in reviving the cooperative. The FMA Board agrees to work with the Farmers Union to explore development opportunities. Following a series of meeting between Carter and the FMA board, the cooperative develops an outline of potential redevelopment opportunities, including an option for value-added marketing. In September 1994, the RMFU successfully assists the producers in obtaining a $100,000 USDA grant to conduct a feasibility study into wheat marketing alternatives for Colorado farmers. The cooperative contracts with the Boston -based consulting firm of Seneschal, Jorgenson and Hale to conduct the analysis. The analysis developed by that firm recommends movement into the par - bake industry. In late 1995, the steering committee contracted with Rural Business Ventures, a consulting group sponsored by the Fanners Union, to guide the next stages of the project. RBV provided technical, financial and legal assistance to start-up projects. After conducting unsuccessful negotiations to develop a joint venture arrangement with a major player in the par -bake arena, the producer group and the RMFU hosted a supper in Limon for a specially invited group of Colorado wheat farmers in June 1996. Farmers at the meeting are informed that one of the two modem par -bake bakeries now operation in Colorado may be available for sale. Participants at the meeting agree to proceed with efforts to develop a new co-op. The group also endorsed the name of Mountain View Harvest for the new cooperative. Through the next five months, the RMFU Cooperative Development Center worked with the new cooperative to develop legal documents, a business and capitati7ation plan, and an equity drive strategy. Mountain View Harvest signed a letter of intent with Gerard's French Bakery in October 1996 to purchase the bakery facility. A formal equity drive launched in November resulted in 60 producer -meetings that concluded with the full subscription of the cooperative's 400 shares of stock at $12,500 per share. Having generated the necessary capital, the new cooperative formally purchased the Gerard's bakery, and a Hudson grain elevator, on April 15, 1997. During its first full quarter of operation under new ownership, the bakery has exceeded initial sales and profit goals established in the business plan. COOPERATIVES ESTABLISHED WITH ASSISTANCE FROM THE RMFU CENTER Ranchers' Choice Cooperative Development of this cooperative began in February 1994 when producers at a small forum in Monte Vista expresses a desire for Farmers Union to assist in the development of locally -owned business structures that will help provide a future for agriculture and young people in the Valley. During the next year, the RMFU began to work with producers in the Valley begin to discuss the potential for developing an organic beef cooperative. In January 1995, producers suggested that an assessment be made into the potential for processing and marketing certified kosher meat products. RMFU arranges for a visit to the San Luis Valley by Rabbi Meyer Kurcfeld of Star K Kosher Certification Company, and Bill Brockhouse of the USDA Cooperative Development Service. At a meeting in LaJara, Colorado, Rabbi Kurcfeld conducted a seminar on kosher processing for approximately 60 producers, and demonstrated the kosher slaughter process at the Quality Packing plant in Sanford (east of LaJara). The co-op steering committee later votes to formally pursue a kosher processing project. USDA agrees to conduct a producer -survey to establish some baseline information for the project. With assistance from the RMFU Center, the steering committee proceeded to develop a feasibility study, and to conduct small test marketing projects. RMFU and the Ganados del Valle, a community -based economic development organization serving northern New Mexico, assisted the steering committee in generating funds for a feasibility study. Producers assist by donating money and/or animals to help leverage financial support from other sources. In April 1996, the steering committee formally organized as a cooperative and established itself as the initial board of directors. Over the next four months, a series of equity drive meetings are conducted in southern Colorado and northern New Mexico. The meetings generated roughly half of the equity capital called for in the feasibility study, but the cooperative decided to proceed to purchase of the processing facility. The cooperative purchased the High quality packing plant near Sanford in August 1996, and began renovation process. Commercial slaughter operations commence at the cooperative in November. Since opening for business, this cooperative has struggled with issues related to undercapitali7ation. Though the market acceptance for the meat products has proven strong, the lack of capital serious crippled the co-ops operations. A serious fire in the main processing facility on May 27 compounded the economic problems. Since the fire the RMFU Co-op Development Center has been working with the Board of Directors of Ranchers Choice, to develop a restructuring plan to for the operation. That effort is ongoing. COOPERATIVE DEVELOPMENT PROJECTS NOW BEING ASSISTED BY THE RMFU CENTER Rocky Mountain Beef The RMFU Center is now assisting a group of Delta County, Colorado, beef producers who have been meeting for more than two years to explore cooperative marketing opportunities for beef. The producers have now chartered the Rocky Mountain Beef Cooperative, and are gathering the funds necessary to assess the feasibility of supplying restaurant trade in the ski resorts, as well as direct sales to consumers. Certified Longhorn Beef The Center is now assisting the Cattlemen's Texas Longhorn Registry (CTLR) in assessing the feasibility of marketing branded Longhorn beef. The CTLR has already enlisted the USDA to conduct a survey of Longhorn producers regarding interest in marketing cooperative. Also, other members of the Registry have actively developed and submitted grant proposals for funding. The RMFU Center is now working with the CTLR to develop organizational documents for a cooperative, and to schedule and conduct a series of producer meetings. This project is a direct offshoot of the RMFU's participation in the Kellogg -funded Challenges & Choices project. Through that project, RMFU President Dave Carter worked with producers in the vicinity of Lordsburg, New Mexico to discuss the opportunities available through cooperative marketing. Specialty Cheese Bob Mailander, newly appointed cooperative development specialist for the RMFU is working with small-scale goat producers in the San Luis Valley of southern Colorado to explore the potential for a Feta Cheese cooperative. NFU Director of Cooperative and Rural Development, Therese Tuttle, has been assisting in the project. New Mexico Flour Mill The New Mexico legislature has appropriated $50,000 to fund a feasibility study for flour milling in eastern New Mexico. The RMFU center is working directly with the producers involved to help assure maximum producer involvement in the project. Dry -Edible Beans Initial meetings have been held with producers in southeastern Wyoming and western Nebraska to outline opportunities for value-added processing of dry -edible beans. This project is in the very formative stages. Pork Processing The RMFU Center has been made aware of an opportunity to purchase a small-scale federally - inspect pork processing plant in northern Colorado. Initial work is now underway to determine if a group of pork producers would want to investigate the purchase of the plant. RURAL COOPERATIVE DEVELOPMENT GRANT EXECUTIVE SUMMARY Economic and social crosswinds are sharply reshaping the landscape of the Rocky Mountain West. Nowhere are those crosswinds carving more dramatic changes than upon the region's agricultural and rural communities. In recent years, rural citizens in the West have begun to grasp the cooperative model as a useful tool. With support from the Rocky Mountain Farmers Union Foundation's Cooperative Development Center, they are now forging new links with consumers to strengthen producers' incomes, increase rural economic vitality, expand employment, preserve their cultural heritage, and protect the valuable natural resource base. This proposal requests funding to support and expand the RMFU Cooperative Development Center to fulfill the growing demands of the Rocky Mountain West. The proposal offers a means to channel resources, technical assistance and support, and leader formation directly to communities now engaged in cooperative development initiatives. Distinct geographic, historic and cultural characteristics that traditionally inhibited the region's cooperative movement are slowly being overcome. Because of the intense publicity and organizing in the past four years, regional leaders are recognizing that cooperatives are a valuable resource that can be used to address unprecedented economic and environmental pressures. This transition is significant. The rural West evolved under a history of resource extraction controlled by absentee owners. The West's ranching culture is rooted in an era when wealthy European gentry owned vast holdings in Colorado and Wyoming. Local residents worked at low wages for eastern -based companies to extract the timber and mineral resources. Likewise, much of New Mexico and southern Colorado developed under the "hacienda" system in which distant "Patrons" dominated the political and economic structure. This history fostered a culture of rugged individualism, where one person's success was often won at the expense of another's failure. This "I'll do it for myself' attitude left agricultural producers and rural citizens ill-equipped to arklress the pressures of rapid population growth and a shifting economy. The economic consolidation in the marketing sector, and the gradual erosion of the economic infrastructure that once supported family agriculture compound the problem. In Colorado, for example, one company now owns 82 percent of the strategic grain elevators (those capable of handling unit trains). Though Wyoming ranks second in the nation in terms of lamb and wool production, no federally inspected lamb slaughter plants currently operate in the state. The merger of the Union Pacific and Southern Pacific Railroads foreshadow the abandonment of hundreds of miles of rural track. And the growth of recreation and tourism is disrupting the value of agricultural land. The environment is being put at risk as welL The influx of new residents is compounding the demand for the region's valuable water resources. Residential sprawl is moving like a cancer across the agricultural land of the Front Range, and the scenic mountain valleys. Changing agricultural production patterns pose environmental consequences as well. In Colorado, swine production on diversified family farms is rapidly being replaced by large- scale confinement units in which the effluent from as many as 500,000 animals is stored in open multi -acre clay -lined lagoons situated directly over major aquifers. In the most recent statistical year, 1994-95, the number of hogs produced in the state increased by sixteen percent, while the number of farms producing hogs dropped by fourteen percent. These same economic, social and environmental forces now present producers with opportunities to develop new relationships with urban consumers through cooperatives. Recent market research clearly identifies growing consumer demand for pork products produced from antibiotic -free hogs raised in non -confinement facilities. Residents in the congested urban corridors consistently list open space preservation as their top concern in surveys conducted in each of the past five years. This opens the opportunity to market the "added -value" of open space preservation in products produced by nearby farmers and ranchers. The newly established Mountain View Harvest Cooperative, for example, is moving rapidly to capitalize upon a "Seed to Sandwich" concept. Producers in limited -resource communities in southern Colorado and northern New Mexico have developed a tangible market for the natural meats processed through the Ranchers' Choice Cooperative. As the purchasing director for the Vitamin Cottage Natural Food Store chain recently wrote, "Ranchers' Choice's commitment to quality and value compliment the same standards Vitamin Cottage set back in 1955 to serving all of our customers. We remain committed to this goal today as we build our businesses together into the future." In northern Colorado, family -size hog producers, as members of Rocky Mountain Pork Cooperative, are investigating the potential to purchase an existing processing facility near Longmont, Colorado. Interest in that facility is motivated in part by the company's success in developing a profitable market for specialty ethnic pork products. The cooperative envisions the opportunity to add to that existing market a new niche of natural pork products. The long-term business plan is proposing to eventually transfer the production facility to a rural community east of the Front Range, thus increasing the employment opportunities in a rural community and lessening the potential conflicts with expanding residential neighborhoods. Small-scale goat and sheep producers in the economically stressed areas of the San Luis Valley are testing the market for specialty cheese products. Longhorn cattle producers in the southwest are now developing a certification and marketing program intended to market the environmental and health benefits of the breed. Each of these projects is emerging through the support and assistance of the Cooperative Development Center administered by the Rocky Mountain Farmers Union Educational and Charitable Foundation. The Rocky Mountain Center is part of a national Network of 2 Cooperative Development Centers combining resources, expertise and innovation to spark a new generation of cooperatives. The demand for assistance continues to overwhelm the current resources of the Rocky Mountain Center and other institutions. Funding and activities outlined in this proposal will provide the capacity to continue and expand the cooperative development outreach in the region. The funding will empower the RMFU Cooperative Development Center to continue to develop its expertise and service structure in two distinct arenas: 1. Working with producers to start new value-added ventures. 2. Working with producers to target acquisition of existing businesses that may benefit from conversion to a farmer -owned cooperative structure. Each of these areas requires unique assistance and expertise. If successful, though, both provide significant benefits to agriculture and rural communities. Activities proposed in this application would address the unique geographic, economic and cultural factors in the Rocky Mountain region. PROJECT GOALS AND OBJECTIVES This project is designed to improve the economic conditions of rural areas through cooperative development. It has four overall goals: 1. To provide technical assistance and advisory services. The Center will continue to work with ten existing cooperative and pre -cooperatives to advance their production and marketing operations by: • Providing funding for regular and on -going financial, marketing and managerial advice from experts in these fields, • Providing an annual review and analysis of existing business plans to determine compliance with and need for changes in the plans, • Facilitating an annual Board of Directors workshop with emphasis on business plan revision and on -going Board training, • Providing technical and financial assistance in writing, printing and sending newsletters and other necessary communication materials to members. The Center will work with new groups of producers that seek assistance in the formation of new cooperatives by: • Working with steering committees to identify and secure resources for marketing and feasibility studies, • Educating producers on the role of cooperatives and the formation activities necessary to create a cooperative business, • Forming the group into a cohesive unit with a clear goal and common vision for the role of the cooperative, 3 • Securing the equity needed through membership equity drives and institutional financing, • Assisting with the initial set-up of the business and the launching of the cooperative. 2. To develop a series of inter -cooperative networks and business linkages. The Center will initiate discussion between cooperatives with common production and marketing activities as a means to: • Develop a business plan that will aid creation of business linkages and networks to guide the sharing of resources and information, • Secure shared marketing experts to search out new opportunities and to promote and advertise cooperative products, • Identify resources and new business activities that could become another vertical linkage or provide increased efficiency to each partnering cooperative, • Develop a business plan for the acquisition of an existing business that would allow cooperatives immediate access to proven markets and in -place operational personnel. The Center will work with other regional centers to identify and organize like -kind businesses into regional or national associations that can successfully compete in national or international markets by: • Sharing information from other Cooperative Development Centers that have already worked with successful national or international cooperatives, • Facilitating contacts between new cooperatives and existing cooperatives that have experience in forming partnerships and in reaching larger markets, • Holding seminars and educational forums that help new cooperatives establish contact with outside experts and existing cooperatives to form networks and business partnerships. 3. To work with agricultural cooperatives in promoting and expanding environmental stewardship. The Center will assist in the promotion of sustainable, environmentally sound practices by: • Targeting cooperative formation in areas that would allow small and medium- sized farmers to stay in business, thereby retaining open -space and diversity in communities which might otherwise become housing or urban development, • Forming cooperative/private business partnerships to gain marketing and transportation advantages that would allow small organic vegetable producers to continue to prosper, • Analyzing the opportunity to form cooperatives based on farmers' markets and community supported agriculture as new value-added marketing opportunities, • Expanding sustainable livestock marketing cooperatives to include other groups of producers who raise animals without antibiotics and hormones as part of environmentally sustainable farming and ranching practices. 4 4. To form and educate a new generation of cooperative leaders. The Center will develop and implement a year -long leadership formation program to equip rural communities for worldwide competition and rapid economic and social change by: • Partnering with four other funding entities to provide twenty couples per year with a substantive curriculum on personal empowerment, community dynamics and cooperative theory and skills, • Providing funding for persons wishing to attend seminars and educational programs that will be of benefit to their cooperative and its success, • Sharing information from other cooperative development centers and other national institutions that develop and promote cooperatives. The Center will host a three-day forum for cooperative leaders to: • Participate in education and training programs, • Share successes and failures with other cooperatives, • Highlight new legal and financial changes, • Expand on national and international marketing opportunities and consumer preferences, • Facilitate inter -cooperative information sharing and networking. 5 USDA support for small ag co-ops includes Colorado:I U.S. Agriculture Secre- being awarded as coopers- .versities—which are work -cooperatives. themselves, tary Dan Glickman an- five development grants to ing directly with .coopera- been eligible to apply for the! nounced that USDA will help 11 co-op development ,tives. The USDA funds will funds; rather than service finance $2.8 million to help centers around the nation primarily be used to providers, the number of ap- jump-start new agricultural start or continue a wide feasibility studies, business plications probably would cooperatives or to improve range of assistance activities development plans, market have tripled, she noted. the operations of existing co- '.that support cooperatives. analysts studies and product Recipients of both the co -1 ops nationwide. -- These co-op centers work in development plans for new ' op development grants and In Colorado $164,300 has partnership with other state, cooperatives seeking to pro- the value-added develop - been awarded to Rocky national and local organiza-' duce value-added goods. ment projects funds had to Mountain Farmers Union lions to help establish and "The large number (104) contribute matching funds i Educational and .Charitable - strengthen -cooperatives of applications USDA re- worth at least 25 percent of Foundation which will be which, in turn, enhance the ceived for the CVAP devel- the USDA funding they will receive. I nomic l condition or .rural in the marketplace. burgeoning interest in rural More information may be used to improve the eco- power of individual farmers 'opment funds indicates a areas through cooperative "For many of our nation's America for new farmer- obtained through Colo - development. farmers, future success will owned co-ops that produce rado's Rural Development Of the $2.8 million; $1.1 hinge on their ability to value-added products from office at 655 Parfet Street, million is being awarded move up the food ladder their members' raw goods," . Room E-100, Lakewood, under the Cooperative from being producers of raw said Jill Long Thompson, CO 80215. You may call Value -Added Program commodities to processors USDA Under Secretary for them at 303-236-2801, ext. (CVAP), with funding pro- of finished or further -refined Rural Development. Had 131 or 1-800-424-6214. vided from the Clinton/Gore , products," Glickman said. administration's Fund for In this way, more of the Rural America. These funds,': money . derived from farm will help 18 cooperatives in;, goods winds up in the pro - 16 states develop plans to ducers' pockets and is spent produce value-added prod- in rural communities." ucts from the agricultural Actual recipients of the commodities their members CVAP funds are service produce. producers —such as depart - The other $1.7 million is ments of agriculture or uni- i :Lc National Cooperative Business Association NEWS RELEASE FOR IMMEDIATE RELEASE CONTACTS: October 15.1997 Leta Mach. (202) 638-6222 lmach@ncbaorg Richard Dines, (202) 638-6222 rdines@neba.org Centers for Cooperative Development are funded Washington, D.C.- The U.S. Department of Agriculture's Grants for Rural Cooperative Devel- opment program is funding eight centers for cooperative development in the National Network of Centers for Cooperative Development, which is assisted by the National Cooperative Business Association's CLUSA Institute for Cooperative Development. The program has obligated in fiscal year 1997 the total amount of funding the centers had requested — $1,210,375. The program, administered by the Rural Business -Cooperative Service of USDA, provides funding for nonprofit organizations operating as centers for cooperative development to provide technical assistance and other resources for cooperative development projects in rural areas. The centers in the National Network of Centers for Cooperative Development organize and assist rural cooperative development projects across the country. The centers also work together and with the CLUSA Institute for Cooperative Development to share ideas and disseminate information on best practices for the development of cooperatives in rural America. The National Network of Centers will undertake the following projects with their grants: • Southeast Center, Federation of Southern Cooperatives, Epes, AL — $139.220 to organize produce marketing cooperatives; conduct comprehensive training programs for cooperative and credit union members and employees; and assess the feasibility of value-added processing cooperatives for lower income, minority farmers in the Southeastern U.S. • Mississippi Delta Center, Winrock International Institute for Agricultural Development, Morrilton, AR — 5169,015 to organize small sawmills into a flexible manufacturing network for greater efficiencies and added value to products. Agri -businesses and other rural businesses will also be organized into a network for technology transfer and greater market access. Western Center, University of California at Davis Center for Cooperatives, Davis, CA — $190,268 to conduct an applied research project to enhance education and direct technical assistance to cooperatives as well as assess the feasibility of a strawberry marketing cooperative and organizing cooperative of Hmong farmers. • Rocky Mountain Center, Rocky Mountain Farmers Union Foundation, Aurora, CO — $164,300 to assist beef producers exploring cooperative marketing opportunities, work with Representing America's Cooperative Community OP MOW 1401 New York Avenue. N.W. • Suite 1100 • Washington. D.C. 20005-2160 ral'ive.or Phone: (202) 638-6222 • Fax (202) 638-1374 • E-mail: ncbatt ncba.org • Web site: httpflwww.eoopa g Centers funded, page 2 small-scale goat ranchers to explore the feasibility of a cooperative to produce and market feta cheese and strengthen existing value-added cooperatives. *Northeast Center, Cooperative Development Institute, Greenfield, MA — $185,000 to pro- vide business planning and organizing for community -based energy purchasing cooperatives and a regional service cooperative to support the other cooperatives as well as to continue con- ducting cooperative leadership training programs. • The Dakotas Center, North Dakota Association of Rural Electric Cooperatives, Mandan, ND — $152,904 to continue work with value-added cooperatives for cattle ranchers and vege- table growers and to provide technical assistance to rural electric and telephone cooperatives in a statewide effort to develop a fiber optic network. Pacific Northwest Center, Puget Sound Development Foundation, Seattle, WA — $65,000 to assist Native American geoduck clam harvesters and hybrid poplar growers in forming coop- eratives to market their products and also to help organize a value-added cooperative food pro- cessing center for livestock and produce on Lopez Island in the San Juan Islands. • Upper Midwest Center, Cooperative Development Services and the University of Wiscon- sin Center for Cooperatives, Madison, Wi — $144,672 to assess the feasibility of an agri- forestry cooperative that produces faster growing hybrid poplars, organize a cooperative of oil- seed producers to market rapeseed for industrial uses and assess the feasibility of alternative livestock cooperatives. Another grant of $184,885 will provide funding fora new center in Mississippi that NCB/Cs CLUSA institute helped organize this past summer. The Mississippi Association of Cooperatives, Jackson, MS. will assist a meat goat cooperative in assembling a business plan, explore and eval- uate options for establishing farmers markets to market products of local cooperatives and help a blueberry growers cooperative with new marketing and processing strategies. The National Cooperative Business Association (NCBA) is a national cross -industry member- ship and trade association representing cooperatives — over 100 million Americans and 47,000 businesses ranging in size from small buying clubs to businesses included in the Fortune 500. Founded in 1916 and known for many years as the Cooperative League of the USA, NCBA's membership includes cooperative businesses in the fields of housing, health care, finance, insur- ance, child care, agricultural marketing and supply, rural utilities and consumer goods and ser- vices as well as associations of cooperatives. NCBA represents cooperatives before Congress and the federal agencies and promotes and supports cooperatives in the U.S. and overseas through training, technical assistance, publications and other programs. NCBA created the CLUSA Insti- tute for Cooperative Development in January 1996 as an initiative to fulfill the development com- ponent of NCBA's mission. -30- For co-op information, visit NCBA's web site: http://www.cooperativesorg Hello