Quentin Burdick Center for Cooperatives

PERSONNEL CHANGES

The major change was a change that didn't happen as Nelson declined the early retirement buy-out offer. Nelson still is considering a possible retirement in June 2003. Margaret Lougheed is now in a regular staffer with the Center after being on time-slip for too many months. Extension Service agreed to contribute funds to partially support Frayne Olson's salary for FY 2003. This recognizes the importance of cooperatives to quality of life and economic development in rural North Dakota.

RESEARCH PROPOSALS IN PROCESS OR SUBMITTED

Agricultural Information Technology (AgIT plans to be a farmer owned information cooperative) approached QBCC for help in their feasibility study.  A $40,000 proposal was submitted for the third time to APUC by AgIT and will be considered in the next round of funding. QBCC will work with AgIt in submitting to the USDA Rural Business Opportunity Grant program---Not funded.

USDA ooperative Services initially approved a project on "Factors Affecting Success or Failure in New Generation Processing Cooperatives," however it was one of the projects eliminated by Under-Secretary Tom Durr. It is a very relevant project at this time as the financial experience of the NGCs is mixed. It was proposed to analyze three aspects of each cooperative: 1. Factors related to the formation stage (vision & visionary, composition of steering committee, creditability, startup documents-feasibility analysis, business plan & prospectus, track record of assistance), 2. Characteristics of the product line and industry entered (competitive structure, business cycles, differentiation within the markets & characteristics of demand), 3. Internal operations of the cooperative (directors and management, debt vs. equity, quality & consistency of product, efficiency of production process, location, infrastructure, workforce, tax considerations, marketing vs. production emphasis). If no funding future possibilities exist, we will write a report based on observation and theory addresses this subject matter

The effort to generate significant additional revenue this year has not been successful. Other possible funding agencies and projects were: 1. Rural Cooperative Center grant program if   marketing/feasibility research projects and training grants meet their funding criteria (did not meet qualification based on research and education), and 2. Nelson is also working with the North Central Regional Aquaculture Center twelve-state Industry Advisory Committee for a possible submission to the USDA value-added cooperative grant program and to the NCRAC funding process (a 50% match is required and was not achieved, this was difficult to generate from a loosely organized steering committee located in 12 states). USDA-RB-Cooperative Services, major government source of general cooperative research funds, had only $300,000 to support research in 2000 and zero funds in 2001 and 2002.

ONGOING RESEARCH

A new study on the Feasibility of a Cooperative Child-Care Center was initiated July 1st. Lougheed will be responsible for conducting the study. The study is funded by the city of Fargo and was completed in November 2002.

The   "Marketing Study of Hybrid Striped Bass" was submitted through the North Central Regional Aquaculture Center (NCRAC), Michigan.   It has a budget of $60,000 and includes the analyzing the feasibility of a market information cooperative composed of producers.   This proposal has been funded for the 2002 to 2004 period.

USDA/CS funded project on the "Training Needs of Traditional Local Cooperatives". This project is conducted in collaboration with University of Wisconsin and Montana State University.  Two phases are nearly completed, a survey of directors and an analysis of changes in industry structure.   The final phase, development of training materials has been initiated. This is aimed at development of strategic planning materials to be used by local cooperatives in planning their long-term strategies.

USDA/CS funded project on the  "Evaluation of Financial Strategies of New Generation Cooperatives (NGC)". The purpose of this project is to evaluate alternative equity management strategies upon the long-term financial performance and stability of NGCs. A spreadsheet model for estimating cooperative financial statements over a ten-year or more time period has been completed and is being reviewed for accuracy. Background information on processing efficiencies, input costs, and output volumes and prices from cooperatives are being collected. It will be entered into the model to estimate the range and probability of profit potential.

USDA/CS funded project on the "Equity Management Issues in New Generation Cooperatives". This project was initiated under the leadership of William Nganje. It focuses on stock values of NGCs, their relationship to income allocation decisions of the cooperative, and long-term equity management issues.

USDA/CS Project on "A Comprehensive Feasibility Study of Production Level Cooperatives.  A summary of current research and current production level cooperatives has been completed. Analysis of the production enterprises and functions, which have potential, is being conducted. A survey instrument to estimate producer interest in various types of production level cooperatives that will be Internet on-line through Zoomerang is nearly complete.   

North Central Regional Aquaculture Center--Conducting a marketing study on the demand for Hybrid Walleye and Sunfish in conjunction with Michigan State University   and Illinois State University. The draft of the major publication has been completed.

EDUCATION & OUTREACH

Executive Training--The seventh training program organized by the QBCC since 1999 was conducted on January 9th in conjunction the North Dakota Marketplace of Ideas.  The theme was "Keys to successfully forming and operating value-added cooperatives. Approximately 65 persons attended the session. The QBCC received much positive publicity from organizing this session and will probably organize another session in 2003. The eighth Executive Training Program, Roles and Responsibilities of Cooperative Directors and Performance Evaluation, scheduled for March 12-14th was cancelled due to low registration.

The Minn-Dak Farmers Cooperative program on "Leadership Discovery and Development" was completed in February 2002.  Formal evaluation by the participants was completed and a questionnaire will be submitted to the directors and selected management staff.  A final report of this experimental leadership development program will be prepared and published.

Due to a request from Michigan State University Extension Service, we presented a repeat of the cooperative governance program on August 20-22 in Michigan. This session contained an expanded program on director evaluation.

Based on a request form American Crystal Sugar, we completed a two-day program on Roles and Responsibilities of the Audit Committee on December 16-17, 2002. In addition to directors from other cooperatives, 23 directors from four sugar cooperatives attended in addition to others.

Outreach--Training NIS Faculty in Free Enterprise Economics and Business--Low level of involvement continues with five Ukrainian agricultural universities as they modify their teaching curriculum and research to a market economy.  

An article on potential Dakota Growers Pasta conversion to a corporation was prepared by Olson/Nelson and submitted to the media through Extension Communication. This was published by AgWeek as was an article based on an interview with Nelson. Olson completed an additional article that will be part of the Co-op month packet of materials.  QBCC website is the distribution mode for Co-op month materials.

Additional media notices and publications in 2002 are: 1. Financial Allocation Strategy for New Generation Cooperatives by William Nganje, Frayne Olson, Brad Streifel and William Nelson, published in The Cooperative Accountant, Fall, 2002; 2. Co-ops: Stumbling blocks hinder co-ops in Feedstuffs, Oct. 7, 2002, writer Gil Gullickson; 

3. ND Union Farmer, Rural Community Co-ops Finding it Difficult to Cultivate Future Managers by Karen Stensrud; 4. Cooperatives in Transition, Burdick Center Director Says, press release by NDSU, published in Farm & Ranch Guide, October 4, 2002 and other media outlets;  5. interview with Prairie Business, Iowa, reporter Dick Layman; and 6. On the co-op road  in Dakota Farmer, September 2002, primarily Olson, secondary, Nelson, writer Lon Tonneson, and others.

Olson delivered presentations on the status of the value-added cooperatives to the annual meeting of Northwest Farm Managers in February and to the spring NDSU Extension Conference in March. Nelson made presentations to the FM Exchange Association in January, the FM Cosmopolitan Club in February, and the annual planning meeting of the North Central Regional Aquaculture Center in February.

The Bloomquist Lecturer for 2002 was the Honorable Robert S. Bergland. He spoke on Cooperatives and Communities at the Holiday Inn, Fargo, on April 3, 2002. It was cosponsored by American Crystal Sugar Cooperative and the Regional Economy Committee of the Chamber of Commerce of Fargo-Moorhead. He also spoke to an agribusiness class at NDSU and had lunch with the agribusiness faculty.

QBCC organized and cosponsored a lecture/discussion with Race Mathews, author of the book, "Jobs of our Own--building a stakeholder society"  Dr. Mathews, Australia, has spent much of the last decade studying the Montdragon Workers Cooperatives of Spain, currently the 7th largest business in Spain owned by 60,000 worker/members. The session was held on June 18th in the Northern Crops Institute.

QBCC was represented at the annual meetings of the National Council of Farmers Cooperatives (January, Olson), CoBank (February, Nelson), CenexHarvestStates (December, Olson), MinnDak Farmers Sugar Cooperative (December, Nelson, Olson) and North Dakota Farmers Union (December, Nelson).

Other outreach events were:

April 5:   Nelson participated in the annual evaluation/planning meeting for ND Marketplace, initiated discussion on ways to involve college students and has continued to be involved in the planning process. Nelson serves as one of the two NDSU representatives on the planning and implementation group for the business plan competition.

April 9: Nelson also participated in the ND Food Processing Association meetings

April 12: Presented "Keys to Successfully Forming a Value-Added Cooperative, Rochdale Institute Conference, Maryland (Nelson)

April 15: Participated in a round-table discussion of organizational changes in cooperatives, Washington, DC, USDA/RD/RB/CS (Nelson)

April 24: Meeting with staffers of the City of Fargo and Sudanese Christian Fellowship about conducting a feasibility study on a childcare center (Lougheed, Nelson)

May 1: Reported the activities of the QBCC to the ND Extension Rural Community Development Committee (Nelson).

May 14-19: Participating in the annual meeting (Glueph, CA) of the Association of Cooperative Educators and led a discussion on the role of university based centers (Nelson)

May 30: Attended the North Central Cooperative Accountants meeting in Hinkley, MN (Nelson)

June 9: Participated in  the project/investigator selection process for the North Central Regional Aquaculture Center (Nelson).

June 18: Organized the lecture by Race Mathews (Nelson, Lougheed, Janzen)

June 30: Participated in the Innovation Center planning meeting organized by the NDAREC and NDCDC (Nelson).

July 18: Presentation to ND Food Processors Association on the activities of QBCC (Nelson)

July 24: Summer Advisory Council meeting of QBCC, Minot.

August 4-8: National Institute on Cooperative Education (NCFC), Chicago. Nelson served a judge on two award committees for the event. (Nelson)

August 30-Sept 2: Nelson represented QBCC at the 49th Annual Western Minnesota Steam Threshers Reunion, Rollag.

October 16: Presented the programs of QBCC at the NDSU Extension Service fall conference (Nelson)

November 13: Attended the NCR 194 annual meeting (Olson)

November 14-15: Attended the Annual Farmers Cooperative Conference (Olson)

November 18-20: Attended the joint meeting of the Wisconsin Federation of Cooperatives and the Minnesota Association of Cooperatives (Nelson)

November 25: Evening speaker at the joint meeting of the CornPlus and Chippewa Valley Ethanol Cooperatives Nelson)

December 5-6: Attended the annual meeting of CHS cooperatives (Olson)

December 10: Attended the annual meeting of MinnDak Farmers Sugar Cooperative (Nelson & Olson)

December 12-13: Attended the annual meeting of ND Farmers Union (Nelson)

Monthly: Participate in the Regional Economic Partnership committee of the Fargo/Moorhead Chamber of Commerce (Nelson).

Education--The 374 cooperatives course was reorganized this spring to include a major emphasis on cooperative entrepreneurship. Students are organized in six to ten persons teams that select a focus, conduct a marketing and feasibility study, develop the business plan including articles of incorporation and bylaws, and complete the project with an one hour equity drive presentation. Guest lecturers have been Steve Noack-cooperative attorney, Mike Warner-Spring Wheat Bakers and Dakota Growers Pasta and the manager of Northland Federal Educators Credit Union. A set of readings available on the Internet has replaced the chapters of the draft textbook as the required reading assignments.

The website and its materials have been used by a number of other instructors from Ohio, South Dakota, Oklahoma and Armenia (Verne House)

PLANNED FUTURE EFFORTS

Research--A request was received from ND Renewal Fuels to conduct a "availability of corn" study.

Education/Training--Cooperatives 374 will be offered at Dickinson State University again in the spring of 2003 simultaneously with the NDSU offering. The spring 2002 class is full (40 + 4 on waiting list at NDSU and 28 at Dickinson State University). This is a new record enrollment for the course.  There is a new College Conference on Cooperatives organized by the ND and Montana Farmers Unions, which NDSU is participating. This was held on February 14-18 in Bozeman. The Minnesota/Wisconsin CCC was held on February 20-23 in Minneapolis.

Two more NGC training programs were offered in 2002. A workshop on "Keys to Successfully Contracting with Consultants" were offered on January 15 (day before Marketplace). A scheduled Maryland conference on value added ventures and cooperative formation has been postponed until fall 2003. A major national conference/roundtable on "Should your cooperative seek non-patron equity capital?" was offered March 20-21 in Minneapolis. This addresses a major issue facing cooperatives in recent years. QBCC was also asked to facilitate a strategic planning session by the directors of Southern Minnesota Sugar Beet Cooperative and we are discussing similar requests from a couple of Michigan processing cooperatives. We continue to respond to training requests by individual cooperatives on a case-by-case basis.

Nelson will have a significant part of the programs organized by ACE, American Ethanol Coalition on March 19 Watertown and 26, Mankato.

Outreach-- QBCC continues to respond to inquiries on questions associated with cooperatives and cooperative development.  Substantial effort continues to be placed on updating and improving the homepage.

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