NEWS
from the Quentin N. Burdick Center for Cooperatives
North Dakota State University
March 1996
The mission of the Quentin N. Burdick Center for Cooperatives is to conduct, promote and coordinate university education and research on cooperatives, to strengthen cooperatives' operation, and to work toward expanding employment and economic opportunities through cooperatives.
From the Director
Cooperatives continue to capture the headlines. Three from the last two days are: "Wheat Co-op Unveiled," "Proposed Midwest beef co-op gets a 'go,'" and "Electric Cooperatives set merger vote next week." I am often asked "will it ever end?" When will farmers run out of dollars to invest? When will we get tired of all of this co-op activity? Aren't we running out of profitable opportunities? No, this activity will not end. It will, however, ebb and flow as it has in the past. But we are not ready for the ebb part yet. There are still opportunities out there to be capitalized on; there is still investing capacity; and there is still enthusiasm and drive among farm leaders.
And so I expect that there will come an ebb as there was for elevator co-ops in the 1920s, farm credit in the 1930s, and RECs in the 1940s. But the drive to restructure and unify in response to changing economic forces will always be with us. Another wave of activity for shared service co-ops among non-agricultural industries and public and non-profit organizations is waiting to take off. You will be seeing more of this wave from the center in the future.
This newsletter reports on activities of the Burdick Center from June 1994 to March 1996. It is organized along the lines of the two-fold mission of university education and research. Auxiliary activities, profiles of three advisory board members and new staff, and materials and available publications complete the newsletter.
University Education
The only university course in North Dakota devoted entirely to cooperatives (Ag. Ec. 374) is taught at NDSU in the spring. It has just been cross-listed as a Business course (Bus. 374). This resulted in nearly a 50% increase in enrollment. Students in the course are from business, engineering, architecture, facility management, agrisystems management, and corporate/community fitness, as well as agricultural economics. A module on cooperatives was introduced in two business courses at NDSU, Business Law and Nonprofit Organizations.
Frayne Olson, Assistant Director, has taken the lead in writing a grant proposal to finance the development of teaching modules on cooperatives for post-secondary agriculture, management, accounting and law instructors at institutions in North Dakota and nearby universities; provide training for their instructors, and make the materials available on the Intemet.
Dave Cobia is teaming up with Dr. Bruce Anderson, Comell University, to co-edit a revision of the book Cooperatives in Agriculture. This book has become a major reference book for cooperative development in the U.S. and internationally as well as the major university textbook. A list of prominent contributors will be writing various sections. Some of whom you may recognize are: Chris Peterson, Michigan State University and St. Paul B.C. board member; Mike Cook, University of Missouri; Bob Cropp, University of Wisconsin; David Barton, Kansas State University; and Ralph Morris of Doherty, Rumble & Butler. Cobia will be working at Comell University in the summer and fall on the project. MSI Insurance Foundation and the NCFC have awarded grants to cover expenses associated with this effort. It is the organizers' hope that this version will play an even greater role in cooperative development, particularly in finance, marketing and legal strategies.
Trips Around the State
Trips around the state were made relating to objectives of the center in the fall of 1994, 1995 and winter of 1996. Economic development agencies were visited regarding the potential of cooperatives as vehicles for economic development and to encourage participation in training programs for new and emerging cooperatives. Instructors of courses at most universities in the state that included a module on cooperatives were visited regarding their needs and the objectives of the center. Updated material on cooperatives and teaching materials adapted to their requirements is desperately needed.
Al Bloomquist Lectureship
Joe Famalette, former American Crystal CEO and currently CEO of Tri Valley Growers, got the Al Bloomquist Lectureship series off to a flying start on March 16, 1995. He set an incredible standard for the future to a standing-room-only crowd. His lecture, "Gazing into the Crystal Ball: Career Opportunities in the Food and Agricultural Industry in the 21st Century," was a lively, forward-looking, take-charge challenge to young folks interested in all aspects of the food production, processing and marketing system. Video and audio copies can be purchased or loaned and limited printed copies are available free. The organizing committee was composed of Don Anderson, currently NDSU Special Assistant to the President for Agricultural Affairs as chair, and Christa Mounts and Todd Leros, student members, along with Al Bloomquist and David Cobia.
The next lecture, scheduled for April 11, 1996, will be given by former Land O'Lakes executive Vern Freeh. His lecture title is "World Trade and Market Globalization: The Other Parts of the Equation." Freeh, NDSU Hall of Fame football player, spent most of his professional life heading Land O'Lakes international and public policy programs. Lately he has been active in coop development in Eastern Europe. Committee members are Harriette McCaul, Dean, College of Business Admin. and students Chad Wika and Tim Mickelson.
Building New-Wave Cooperatives-A Regional Conference
At the invitation of representatives of the NW Min. Initiative Fund and Ag. Utilization Res. Institute of Min., the Burdick Center played an active role in planning the above conference. Over 100 farmers and economic development leaders participated in animated discussions and presentations on Feb. 7 at Crookston, MN. Participants were instructed on the whys and hows of new cooperative development.
Training Program for New and Emerging Cooperatives
We were pleased and gratified with the participation and benefits derived from the two training programs for new and emerging cooperatives. They were held at Mandan in June of 1994 and 1995. These programs were financed by a federal Rural Cooperative Development grant received through the ND Coordinating Council for Cooperatives. Funding for the second program was also received from the former ND Association of Cooperatives. Over 40 participants representing steering committee members of new cooperatives and economic development agencies received training. Out-of-state participants came from Canada, Kansas, Pennsylvania, Minnesota, Washington, and South Dakota. Topics included planning, project evaluation, management and board of directors, marketing, finance, legal and coalition building issues tailored to new co-ops.
We were fortunate to have nationally known out-of-state presenters including Bill Jorgenson, partner in the Senechel, Jorgenson and Hale consulting firm; Bruce Anderson, Comell University; David Barton, Director of the Capper Center for Cooperatives, Kansas State University; Lee Estenson of the St. Paul Bank for Cooperatives; Alan Gerber, Executive Director, Minnesota Association of Cooperatives; Randy Torgerson, Assistant Administrator, RBCDS, USDA; and J.D. Lynd, Executive Director, SD Association of Cooperatives, all made outstanding presentations. Local presentations by Joe Talley, Pro Gold; Kermit Bye, partner, Vogel, Brantner, Kelly, Knutson, Weir & Bye; Bill Patrie, NDAREC; Jack Piela, ND CCC; Connie Sprynczynatyk, ND Coalition Council and David Cobia, Dir. of Quentin Burdick Center for Cooperatives. Panels composed primarily of representatives from new co-op steering committees were a highlight. They were stimulating and helpful and forthrightly and unselfishly taught lessons learned in the crucible of experience. Future federal funding for programs such as this are in doubt. Participants encouraged us to continue them on a self-financing basis, stating that they would pay a registration fee to attend. This possibility is being evaluated.
Extension Agent Training
Extension agents' interest in cooperatives is heightened by requests for information and help as well as publicity associated with the creation of new cooperatives. Frayne Olson, Assistant Director, conducted a training program for county agents on March 5 and an orientation session for all agents at the Extension's spring conference on March 28.
Market Place '96: Potential for Non-Ag Cooperatives
The cooperative form of business, which has worked so well for agriculture, has potential for non-agricultural business as well. This was the message of a workshop at Market Place '96 organized by Sanjib Bhuyan of the Burdick Center. Brooks Wilson, Larry Leistritz and Dave Cobia were also presenters.
Congressional Staff and Four Million Dollar Tours
The Burdick Center, with funds provided by the former N.D. Association of Cooperatives, helped to sponsor the August 1995 Congressional Tour. This tour, organized by the North Dakota Ag. Foundation, orients congressional staffers regarding North Dakota agriculture. Brooks Wilson, representing the center, stressed the role and importance of cooperatives to the group.
Dave Cobia spoke, and Sanjib Bhuyan and Brooks Wilson participated in NDAREC's July 12-15 Four Million Dollar Tour. This tour, taking its name from the REC loan volume for co-op development, made on site visits to new value-added cooperatives. It was impressive to see the heightened interest by tour participants, the aggressive co-op development, and the initiative taken by area farmers and supporting institutions such as the NDAREC. Delegations came from California to Maine and Canada to Missouri.
Research Completed
Economic-engineering cost studies of fuel and dry fertilizer distribution by local co-ops reflecting operating characteristics across North Dakota have been published by NDSU as research reports. Fixed costs were dominant over variable costs in all situations. As a result, strategies to increase sales and size or sales density had nearly equal percentage reduction in fixed costs. Co-ops with overlapping sales area can achieve significant savings by some form of consolidation, even if facilities are written off. Copies of the research can be obtained from the Burdick Center by requesting Research Report No. 334 (fuel) or 339 (fertilizer).
Research Underway
Executive compensation: Dave Cobia is collaborating with Rob King, University of Minnesota, and David Trechter, University of Wisconsin-River Falls, on managerial compensation practices used by successful cooperatives.
Dr. Sanjib Bhuyan is estimating the potential for non-agricultural cooperatives in the Northern Plains States. This includes the potential for non-agricultural businesses as well as shared-service cooperatives among non-profit and governmental units.
Dr. Gary Goreham, Dr. Brooks Wilson and Theron Kibbe have completed a survey of ag loan officers regarding their role as gatekeepers for investment in new cooperatives. These results should be published next summer. We have received many requests for information on the difference between farmers who do and do not join the new value-added cooperatives. Efforts to obtain answers to these questions are underway.
Dr. Brooks Wilson is also analyzing external institutional support available to farm groups in North Dakota who wish to start cooperatives.
These research efforts are being coordinated with a complementary study headed by Dr. Michael Cook, University of Missouri, evaluating internal group dynamics and marketing and finance strategies employed by new co-ops in our region.
Biography of Quentin Burdick
Senator Conrad's office asked the center to manage the preparation of a biography on Senator Burdick. Senator Conrad has been raising funds for the project. Just over $20,000 has been raised to date. A minimum of another $20,000 is needed for completion. Dan Rylance, a reporter and author, has been contracted to prepare the work. He has conducted 103 interviews with colleagues, friends and associates of Senator Burdick and has collected and reviewed newspaper clippings, Senator Burdick's speeches and other supporting documents.
Fulbright Scholar from Ukraine
The Burdick Center and NDSU were hosts to Dr. Vitaly Zinovchuk from Ukraine for eight months in 1994-1995. His main task was to develop a model for the transition from state-controlled agricultural industry to market economy cooperatives. His approach was to apply features of American cooperatives to his country. The study was published as a 187-page monograph titled Farmer Cooperatives versus Collective Farmers. Ukraine has rich soil and happy people with great potential but with heavy burdens of industrial and nuclear pollution and the institutional aftermath of former Soviet Union domination. His wife, Nataly, an environmental economist and 5-year-old son, Rustislov, accompanied him.
Cobia in Japan
A talk, "Dynamics of American Cooperative Movement," David Cobia gave at a 2-day Japanese nation-wide seminar on August 8, 1994, was recently published in that country. The seminar was sponsored by All-In-One, an investor oriented feed company whose major clients are cooperatives. It was held in conjunction with the publication of a Japanese translation of Cobia's book.
Japanese cooperatives are coming under tremendous pressure for restructuring. Local cooperatives are members of Perfecture (state) cooperatives who in turn are members of Zen-noh. This national co-op is about four times larger than Farmland Industries, the largest co-op in the USA. Their cooperatives are reportedly infected with political intrigue. Board members often play an active role in management. Also, nearly all Japanese farmers obtain their supplies and market their products through cooperatives, because that is the only way they can participate in government subsidies. These government programs will presumably become less important as subsidies are reduced in compliance with GATT. Therefore, a critical historical link between Japanese farmers and their cooperative will be eroded.
Endowment Fund
The NDSU Development Foundation office has informed the center that the payment history on pledges for the center is unusually good and setting a high standard of performance. Income to the center and grants received are enabling us to get off to a flying start.
Meet Key Burdick Center People
Three Advisory Board Members
Donald Anderson, Special Assistant to the President for Agricultural Affairs, representing North Dakota State University, Fargo
Dr. Anderson came out of retirement to serve as Special Assistant to the President for Agricultural Affairs, January 1995, following the resignation of Brendan Donnelly as Vice President of Agriculture. Anderson had retired from his post as associate dean and director, College of Agriculture, in 1993.
Anderson was raised in the Fullerton, ND area. He earned a B.S. (1953) and a M.S. degrees from NDSU in ag economics and a Ph.D. in ag economics from the Univ. of Minnesota. Anderson served as an assistant professor from 1957-1962, leaving in 1962 for the University of Minnesota as a graduate assistant. He returned to the NDSU faculty in 1964, and was appointed Associate Dean & Director of the College of Agriculture and Associate Director of Agriculture Experiment Station.
Anderson and his wife, Joanne, live in Pelican Rapids and have five grown children. He enjoys hunting, fishing, traveling and golf.
Everett Dobrinski, representing St. Paul Bank for Cooperatives
Everett Dobrinski and his wife, Peggy, operate a small grains farm in the Makoti area. Everett and Peggy have a daughter, Darla, and a son, Darren.
Dobrinski graduated from Makoti High School in 1964. He graduated in natural science in 1969 at the University of North Dakota.
Dobrinski is chair of the Verendyne Electric Co-op, is a member of the North Dakota House of Representatives and Central Power Co-op, and is on the board of the St. Paul Bank for Cooperatives.
Dennis Hill, representing North Dakota Coordinating Council of Cooperatives
Dennis Hill is the executive vice president and general manager of NDAREC. Hill graduated from White Shield High School in 1971. He earned a bachelor degree in university studies from NDSU in 1975. In 1981, he was managing editor of the North Dakota Rural Electric Cooperatives magazine. Hill has been with NDAREC since 1987.
He is chair of N.D. Water Coalition; board member and past president of the N.D. Consensus Council; Co-chair of the Growing North Dakota Economic Development Program; and past president of Rural Electric statewide Manager's Association.
Hill enjoys sailing and tennis. He and his wife, Patricia, have a son, Nathan, 14 and a daughter Shannon, 11.
Assistant Director
Frayne Olson was born and raised on a small grain and bean farm at Buxton, N.D. He earned B.S. and M.S. degrees in agricultural economics from North Dakota State University. He worked with the NDSU Extension Service for eight years as a Farm Management Specialist before beginning his duties as assistant director of the Quentin Burdick Center for Cooperatives in October 1995.
During the summer, Frayne farms with his father and brother at Buxton, and is an active member of several local cooperatives. He brings a unique combination of applied knowledge and technical training to the study of cooperatives.
Frayne and his wife, Jill, have one daughter, Erin, and enjoy camping and outdoor activities.
Research Associates
Dr. Sanjib Bhuyan, a native of Assam, India, completed his B.S. in agriculture with Distinction (Honor) from the Assam Agriculture University in 1986. He received his M.S. in human settlements planning in 1988 with the highest honors from the Asian Institute of Technology in Bangkok, Thailand. He joined the Division of Human Settlement Development as a research associate in January 1989.
Sanjib received his M.S. in agricultural economics from the University of Nebraska-Lincoln in 1992, along with the most distinguished graduate research award. He also received the most outstanding graduate research work related to the field of agricultural cooperatives in 1993 for his M.S. thesis, awarded by the National Council of Farmers Cooperatives, Washington, D.C.
Sanjib joined the Ph.D. program in the University of Connecticut, Storrs and received his M.S. and Ph.D. in agricultural economics in August 1994 and August 1995 respectively. He joined the center in July 1995.
Sanjib's research and teaching interests are in industrial organization and policy, agribusiness marketing and cooperatives. Several of his research papers have been published as journal articles, book chapters and research reports. Currently, Sanjib is working on a project to assess potential for nonagricultural cooperatives in the great plains states.
Dr. Brooks Wilson earned a B.S. degree in Economics, and a M.S. and Ph.D. in agricultural economics at the University of California-Davis. His areas of study include cooperative economics, finance, trade and deregulation. Upon finishing his degree, he worked for three years at Kansas State University. He joined the Quentin Burdick Center for Cooperatives in the summer of 1995. In addition to his academic experience, Brooks worked as a loan officer for the Sacramento Bank for Cooperatives, and the first Northern Bank of Dixon, a small community bank in Northern California.
Brooks and his wife, Sarah, have two daughters--Sabrina and Stephanie, and two sons--Addison and Benjamin. They enjoy church and community activities.
Mimi Monson, the center's half-time secretary, started in July of 1995. She has been at NDSU for four years. Prior to that, she was a court reporter. Mimi and her husband, Rocky, have one daughter and live in Moorhead.
Selected Materials Available from the Center
Video (loan)
Al Bloomquist Lectureship, Gazing into the Crystal Ball: Career Opportunities in the Food & Agriculture Industry in the 21st Century by Joseph Famalette; audio version also available
Reviving Renville: A Cooperative Approach to Development, Minn. Assoc. Of Cooperatives
Roachdale Principles (Ken Astrup)
Cooperatives, The Farmers Way
How to Start a Cooperative Food Buying Club, National Cooperative Business Association
Cooperatives: An Economic Alternative
Dedication luncheon for the QBCC
Minn-Dak Farmers Co-op-History and Mortgage Burning Ceremony
Printed Materials
Al Bloomquist Lectureship by Joseph Famalette, Gazing into the Crystal Ball: Career Opportunities in the Food and Agricultural Industry in the 21st Century.
Incorporation statutes for ND, SD and MN Selected articles on new-wave, value-added cooperatives
Dahl, B.L., D.W. Cobia, & F.J. Dooley. 1995. Bulk Fuel Distribution Costs for Cooperatives in North Dakota. Ag. Econ. Rpt. #334. ND Ag. Exp. Sta.
Dahl, B.L., D.W. Cobia, & F.J. Dooley. 1995. Distribution Costs for Dry Fertilizer Cooperatives in North Dakota. Ag. Econ. Rpt. #339. ND Ag. Exp. Sta.
Zinovchuk, V.V. 1995. Farmer Cooperatives Versus Collective Farms: American Studies on Ukrainian Problems. ND Ag. Exp. Sta., 186 pp.
Cobia, David W., ed., Cooperatives in Agriculture, Englewood Cliffs, N.J.: Prentice-Hall, 1989.
Royer, Jeffrey S., and David W. Cobia, "Measuring the Equity Redemption Performance of Farmer Cooperatives," North Central Journal of Agricultural Economics, Vol. 6, No. 1, January 1984.
Gunn, Steven P., and David W. Cobia, Grain Marketing Cooperatives: Adjustments to Farms Programs, Ag. Econ. Report 291, N.D. Ag. Exp. Sta., September 1992.
Cobia, David W., William W. Wilson, Steven P. Gunn, and Randal C. Coon, Pricing Systems of Trainloading Country Elevator Cooperatives, Ag. Econ. Report No. 214, N.D. Ag. Exp. Sta., December 1986.
Cobia, David W., and Randal C. Coon, Pricing Systems of Trainloading Country Elevator Cooperatives: A Summary, Ag. Econ. Report 215, N.D. Ag. Exp. Sta., December 1986.
Gunn, Steven and David W. Cobia, Strategies for Survival in the Country Elevator Industry, Ag. Econ. Misc. Report 122, Dept. of Ag. Econ., N.D.S.U., Fargo, May 1989.
Hatfield, Harlan K., David W. Cobia, Gordon W. Erlandson, Consolidation of Allocated Equity for Merging Cooperatives Previously Operating on a Revolving Fund, Ag. Econ. Misc. Report 96, Dept. of Ag. Econ., N.D.S.U., Fargo, April 1986.
Dynamics of American Cooperative Movement, talk by David Cobia, Tokyo, Japan, August 1994.
Handout material and speaker notes in looseleaf form from the June 1994 and June 1995 Training Program for New and Emerging Cooperatives.
This newsletter is published by the Quentin N. Burdick for
Cooperatives, Box 5636, NDSU, Fargo, ND 58105 Ph. (701) 231-
7446, FAX (701) 231-1059. Advisory Bd: S Olson, NDAREC,
Chair; G. Kuster, Harvest States, Vice Chair; M. Watne, ND
Farmers Union, Exec. Com.; D. Anderson, NDSU, Exec. Com., H.
McCaul, NDSU, Exec. Com., E. Dobrinski, St. Paul BC; Dennis
Hill, NDCC; F Leiphon, CENEX; D. Loer, Minnkota Power; R.
Maras, LO'L; R. McPhail, Basin Elec.; D. Melander, Cass-Clay
Creamery; and D. Stenerson, Farmland Ind.
March 1996
NDSU is an equal opportunity institution