A Supplement to Mi(higon Form News April 15"1991 Sponsored by: ~«:'r;?ketJ~Dg ~ Program of Michigan ~ ltrmmIl Michigan Soybean Promotion Committee •• MICHIGAN FARM BlJREAlJ From the President A s producers, we learned long ago there are two obvious ways to increase our bottom lines - reduce costs per unit of produc- tion or increase the price we receive for our product. Controlling our input costs has chal- lenged all of us to manage every aspect of our operation carefully to increase profitability. But what do you do if you've done all that you can to control your farm's input cost? find- ing or expanding a new market for your com- modity is the other way to add value to the commodities that we produce - whether it's milk, com, soybeans, cherries or any other com- modity grown in Michigan. While the tenn "value-added agriculture" may at first g1ance seem intimidating, it's really nothing new. The livestock industry, for example, has ap- plied the value-added concept for years, simply by taking conunon commodities such as com, soy- beans and forages and using them to produce milk and meat products. The fruit and vegetable indus- Trendsin u.s. agriculture ment for Michigan communities. Michigan is already E vents of the last several years have set the keting techniques, joint ventures with other produc- try utilizes value-added processing as well as direct course for the future of agriculture into the ers and/or handlers, and vertical integration. Allof a leader in fruit and vegetable processing and these marketing to improve grower returns. Thanks to next century. these trends are in response to the need of producers benefits can be expanded to other crops. new technology and new products, we now have Expanding International Trade to receive their income from the market. New Generation Cooperatives opportunities to explore and implement the value. One of the defining moments for the future of BiotechnologyNalue-Enhanced Grain Grower ownership of value-added processing added concept in other ways and improve the value agriculture was the completion of the Uruguay Round A major catalyst in the expansion of value- facilities through the formation of "New Genera- of your commodity beyond the farm gate. of international trade negotiations induding the provi- added agriculture is the advancement and applica- tion Cooperatives" provides opportunities for pro- What you hold in your hands is a guide to sions covering agricultural trade policy. The General tion of biotechnology in the seed industry. ducers to become more vertically integrated and making you, as a producer in Michigan's vast agri- Agreement on Tariffsand Trade (GAIT) put agriculture Value enhanced grain (VEG) includes a wide share in the profits of producing value-added prod- cultural landscape, more profitable. Together Michi. on a path toward more open trade polides with the range of attributes such as waxy, high-oil, white ucts. The trend began in the Northern Plains where gan Farm Bureau, the Com Marketing Program of goal of expanding global economic activity. The agree- corn or corn that exhibits other desirable traits that over 20 new generation cooperatives have been Michigan and the Michigan Soybean Promotion ment sets in motion a mechanism and phase out trade- make it more valuable to end-users. Profit opportu- formed in the last several years processing a wide Committee have teamed up to provide you with an distorting domestic polides and expon subsidies with nities, manufacturer quality assurance programs, variety of commodities from sugar beets to bison. in-depth explanation of the trends in value-added the goal of creating a more level playing field for agri- food safety concerns, and the search for new, more This represents a shift in attitude for growers from a agriculture and what it takes to get started. cultural trade between member countries. palatable, useful products will drive the change to producer of raw commodities to a broader view of You'll also fmd some examples of new The other major trade agreement impacting VEG or identity-preserved grain. the overall food system from producer to consumer. products geared toward the value-added market North America was the passage of the Canadian Free VEG is a small fraction of the bulk grain mar- Organiclnatural foods and examples of how other farmers across the Trade Agreement (CFTA) between the United States ket today but it's a trend that is attracting compa- The natural food market continues to grow country have teamed up and pooled their re- and Canada and later the North American Free Trade nies like Monsanto, Cargill, ADM, ConAgra, Pioneer, with the dairy sector leading the expansion. U.S. sources to improve their bottom line. Agreement (NAFTA),which encompasses trade poli- DuPont and DeKalb. Companies like Monsanto organic milk sales are estimated to total S60 million The added-value cooperative is an exdting cies among the United States, Mexico and Canada. have responded to these opportunities by reinvent- per year. Niche marketing through health food stores concept that allows farmers to become more The passage of GAIT and NAFTAset the course ing themselves as biotechnology innovators, not and local cooperatives provides marketing opportuni- vertically integrated and realize a bigger return on toward expanded global commerce that has led to real just chemical companies. These companies are ties to growers willing to take the risk in adopting their farm investment .. growth in agricultural trade and new opportunities for redesigning the genetics of corn, soybeans and organic cultural practices. Price premiums of up to 30 I believe now is the time to aggressively pur- U.S. agriculture. As global economic conditions im- other crops to meet specialty applications. This percent to growers may encourage further expansion sue the new-wave cooperative concept in Michigan. prove with developing countries leading the expan- expansion of value-enhanced crops is not limited to of the natural food segment, including grower-owned Our ongoing efforts to revitalize the state's livestock sion in percentage gains in per capita incomes, the food uses as huge markets exist for biodegradable processing and distribution facilities. industry with a S70 million investment at our land future looks bright for the continued growth in export materials to replace paper and plastics creating a New technology grant university has poised our state for tremen- demand for U.S. food and ag commodities. We have new carbohydrate economy. USDA estimates that New technology is creating opportunities for dous growth in the livestock sector. also seen an impressive upsurge in exports of value- within the next 10 years, 50 percent of U.S. corn will improved low-cost communication between buyers We are equally committed to the cropping added agricultural products, such as processed meats be "specialty-attribute" or "identity-preserved." and sellers. A recent AFBF survey of young farmers sector as well, through Project GREEEN which and fruits and vegetables. The continuation of open Identity Preserved Marketing showed Internet use has exploded since last year. has a strong food processing component. Our global markets is keenly important to Michigan and Marketing opportunities will also expand as Nearly one-third reponed having access to the inter- state's microclimates, diverse commodity base U.S. agriculture as over one-quarter of ourlotal agri- contractual agreements between producers and net. E-mail was used by almost one-fourth of the re- and close proximity to markets create incredible cultural production finds its way to foreign consumers. end-users will become more commonplace to facili- spondents. The Internet could be utilized by produc- opportunities for a wide range of value-added Planting flexibility and Freedom to Farm tate identity-preserved marketing. There are oppor. ers of specialty crops and processed products to inex- processing operations that aren't typically avail- The next major influence on U.S. agriculture tunities for producers to work together coopera- pensively reach customers around the world. able to producers in most states. was the fundamental change in federal farm policy tively earning premiums over the price of No.2 The Internet will also provide for rapid com- I urge you to use this infonnation to your with the passage of the Federal Agriculture Improve- yellow com by raising specialty grains to better munication between producers and handlers, thus advantage. Farm Bureau also has resources, ment and Refonn Act (FAIR) or freedom to farm bill, meet end-user demands. H&B Specialties, Inc. of promoting enhanced marketing relationships. The such as our Public Affairs Division and our Com- which eliminated price suppon programs and supply Pleasant Plains, Ill. pays farmers about 25 cents per Internet will also bring instant access to world modity and Environmental Division, poised to management mechanisms that had been in place for bushel over ordinary corn. They originate grain for news, weather production information and market provide you information on legislative, regulato- over 60 years. The new farm program allows produc- a Japanese com chip manufacturer and are looking news to a wide band of producers at a very inex- ry and economic issues. ers broad planting flexibility and expands risk man- for high test weight, minimal stress cracks and a low pensive price. Most importantly, I urge you to view the agement tools through and improvements to the percentage of broken kernels. The availability of global positioning systems, Michigan Farm Bureau and your county Farm crop insurance program. The freedom to make plant- VEG leads to increased processor and end-user yield monitors and site-spedfic application of inputs Bureau as a catalyst that can provide you with ing decisions based on market demands is a funda- value and opens the door to funher value-added provides producers with information and tools to the networking so often necessary to take these mental change that offers many opponunities for processing of agricultural commodities. Currently help evaluate cropping alternatives and facilitate the ideas from the concept stage to reality .• diversification in Michigan. about 60% of Michigan's corn crop and over 90% of move to identity-preserved marketing opportunities. Sincerely, While the FAIRexpands our ability to produce our soybean crop is exponed to be utilized outside Given the potential impact of these trends, ~a~nt~ for the market, it will also lead to increased market Michigan. The expansion of value-added processing MFB, CMPM and MSPC believe it is vital for Michi- volatility. In response, producers will need to focus on within the state, such as the recent completion of the gan producers to arm themselves with the informa- risk management. Risk management will take on many Zeeland Farm Soya plant, provides real benefits to tion found in this special insert to further enhance Michigan Farm Bureau forms, including price/crop insurance, advanced mar- producers as well as jobs and economic develop- the value of their products .• Sponsored by: Corn Marketing Program of Michigan • Michigan Farm Bureau • Michigan Soybean Promotion Committee A Supplement to Mi(higon Form News April 15"1991 Governor Announces Tax-FreeRenaissance Zones Upper Peninsula. Six urban zones, three rural communities," Engler said. "My philosophy "Now, the next step is [0 go tell people in zones and twO military zones were chosen. has always been that lower taxes create other states that they should bring their busi- The following communities were recommend- more jobs. In these distressed communities, nesses to Michigan because we've got the most ed for renaissance zones: I believe that by eliminating the barriers of powerful incentive in the nation. Zero taxes. government, we can unleash the power of No paperwork, no huge bureaucracies, just the private sector to bring good-paying jobs zero taxes if you invest in our neediest commu- Zone lYDe • Acreaae • Duration to Michigan. The nation will be watching nities," Engler said. "I predict you will see an Benton HarborlSt JosepMlenton Twp., Urban this experiment, and they will see Michigan increasing level of investment in these renais- 120 acres • 10 ars succeed." Engler proposed renaissance sance zones." Engler also complimented the 20 Detroit, Urban' 1,345 acres • 12 ars zones as a powerful incentive to revitalize local communities that applied for a zone for Flint, Urban • 836 acres • 15 ears economically distressed areas throughout rising to the challenge of becoming a renais- Grand Ra ids, Urban • 536 acres • 15 ears the state. The zones are the ultimate exten- sance zone. The law ultimately allowed only 11 Lansin ,Urban. 110 acres • 12 ears sion of Engler's philosophy that reducing to be chosen, including the two closed military Sa inaw, Urban. 743 acres' 12 ars taxes spurs economic growth. Byeliminat- installations. GogebicJOntonagonIHoughton Counties, Rural ing taxes altogether, Engler is seeking to "For the first time, the state said, 'We'll 2,917 acres • 15 years maximize both the speed and size of the give up our share, but you've got to give up Panel selects 11 areas statewide, Manistee County, Rural • 556 acres • 15 years investment in these areas. the local share of taxes also to make this taxes waived beginning Jan. 1 ontca ratlot ountles. ura Michigan is the first and only state in the work,' and 20 communities rose to that chal- G ov. John Engler announced the recom 1,870 acres • 15 ears country with these tax-free zones, which require lenge. I was pleasantly surprised to see gov- mendations of the Renaissance Zone Warren Tank, (former) Military only that residents or businesses be located within ernments at all levels work together on these Review Board for the creation of 11 153acres'15 ars the zone's geographic boundaries [0 get the exemp- zones with an unprecedented level of cooper- renaissance zones throughout the state. The Wurtsmith Air Force Base, (former) Military tions. Those in one of the zones will pay no Person- ation. The communities really put a lot of zones, which will be free of virtually all state and 2,202 acres • 15 years allncome Tax, no Single Business Tax, no State creativity and cooperation into their applica- local taxes for both residents and businesses, are Education Tax, no Real Property Tax, no Personal tions even going so far as to submit joint ap- scattered from Detroit in southeast Michigan to "Michigan begins the nation's boldest Property Tax, no Local Income Tax and no Utility plications, which is something we didn't ex- three counties in the western-most portion of the experiment in the renewal of distressed Users Tax. pect," Engler said .• M ichigan has done the unthinkable by cre- ating 11 tax-free Renaissance Zones. Busi- nesses and residents who locate in one of these Michigan's 6 mil State Education Tax, Local Per- sonal Property Tax, Local Real Property Tax, Local Income Tax, and Utility Users Tax. eral taxes or fees for service. Businesses would also pay property taxes which result from local bonded indebtedness or special assessments so occurs in the area. The two counties are blessed with rich soils, some of which are sandy loam and are moderately selected areas pay virtually no taxes for up [0 15 What is a Tax-Free Renaissance Zone?: as not to jeopardize the community's current to well drained. Water resources are excellent, with years. The 11 Renaissance Zones - six urban, Michigan's Tax-Free Renaissance Zones are bonds. Businesses would also pay Michigan's six most irrigation water coming from wells ranging three rural and two former military bases - are 11 regions designated as virtually tax free for percent sales tax. Michigan does not allow local from 100 to 300 feet in depth. located throughout Michigan. any business or resident presently in or moving sales taxes. There are almost 50,000 acres of irrigated The urban Renaissance Zones are located to a zone. The zones are designated to provide Montcalm/Gratiot Counties' Renaissance land within .the two counties. in the Benton Harbor/St. Joseph area of south- selected communities with the most powerful Zone Located in the heart of Michigan's Lower Industrial and commercial development is west Michigan, Detroit, Flint, Grand Rapids, market based initiative - NO TAXES- to spur Peninsula, Montcalm and Gratiot Counties re- evident in the area with six existing industrial Lansing and Saginaw. The rural zones are in new jobs and investment. Each Renaissance flect the diversity of the state's agricultural parks (3 certified) and an additional three certi- Gobebic/OntonagonlHoughton counties in the Zone can be comprised of up to six smaller abundance. fied parks are planned. western Upper Peninsula, Manistee in northwest zones (sub-zones) which are located throughout Approximately 80% of land base in both Immediate access to state highways, free- Michigan and Montcalm/Gratiot counties in the the community to give businesses more options counties is used for agriculture, making the ways and other transportation, making a close heart of the state. The two former military bases on where to locate. location of a processing facility ideal. link to your markets .. are Warren Tank in southeast Michigan and What taxes would a business still pay The two counties are among the leaders in An '1\griculrural Alliance" already in place Wurtsmith in northeast Michigan. in a Renaissance Zone?: the state in the production of field corn, seed which is a working partnership among local By law, Renaissance Zones waive the fol- A business would pay unemployment insur- corn, dry edible beans, potatoes, soybeans, alfal- farmers, banks, businesses, government and lowing local and state taxes: Michigan Single ance, social security taxes, worker's compensa- fa and a wide variety of processing vegetables. state agricultural organizations to help address Business Tax, Michigan Personal Income Tax, tion, sewer and water fees which are either fed- Livestock, dairy and poultry production also your needs .• The Michigan advantage ~..A&i . '5 1'1:1 F ood and agriculture in Michigan is a $37 billion industry, the state's second largest, representing every phase from growing and • Key link on the Mexico-to-Canada NAFTA highway, including the newly modernized Port Huron-Sarnia rail bridge connection to processing to packaging, retailing and distribu- Canada tion. The state leads the nation in production • Abundant supply of both surface and of seven commercial crops, ranking fifth or ground water for growers and processors higher in 25 others. The output of Michigan's • Four federally recognized wine grape-grow- fields and farms is the second most diverse in ing areas bordering on Lake Michigan the U.S. - from apples to zucchini and just • A regulatory environment that encourages about everything in between. and supports innovations like field com- _. ',~,'14' Michigan: • Home of the nation's premier agricultural posting of fruit and vegetable wastes • America's fourth ranking exporter of fruit ~:Il'MM J land grant college, Michigan State Universi- products, seventh in vegetables The opening of Zeeland Farm Soya~ (ZFS)soybean processing facility represents just one of the many ty, established in 1855. • Exported a record S836 million in food and ways Michigan producers have realized an added value to a cpmmodity. ZFS'sprocesses almost 6 mil- • A skilled and well-trained workforce agricultural goods in 1994 lion bushels of soybeans and is looking to expand their processing capacity by 50 percent A guide for food exporters Michigan can help food exportenl the following slate of services. information. Companies should perform their own • Brussels, Belgium (including United Kingdom xpon of food products, food processing equip- cultural and product research of an intended for- and Germany) E ment and agricultural commodities are the growth markets in the 1990s and beyond! Export directory The key tool for industry exponers is the Michi- gan Food and Agricultural Expon Directory. It lists eign market, but MDAcan help determine which markets are generally most promising. • Johannesburg, South Africa • Tokyo, Japan While U.S.food markets are generally very mature all known companies with a Michigan processing or Also as you research foreign markets, MDA- • Wanchai, Hong Kong and increasing at only about 1 percent per year, some production plant, that are currently exponing or International can help you locate good resources These offices can provide targeted lists of JmlS of the world have four times that growth rate. And want to start. Listings are free. for information such as agriculture contact in U.S. foreign distributors, identify competitive they have the funds to pay for high'JUalityU.S.foods. Benefits of being included in the Export Di- embassies, Michigan international offices and other products and provide other in-country assis- The challenge for Michigan food processors, rectory are two-fold. All listed companies re- agencies. tance. They also return trade leads to Michi- commodity shippers and agricultural suppliers ceive the Michigan Market Share that informs Expon education programs are organized annu- gan, for distrib~tion to appropriate food and is to take advantage of these growth markets by about state-organized domestic marketing and ally for Michigan food producers. ag companies. looking beyond our borders. As the world export programs. The directory is also mailed SlxlntematIonIllOffices Export martet Ktlvltles moves toward a global economy, successful free of charge to food exporters and U.S. over- Michigan Jobs Commission's six international MDA-Intemational occasionally organizes pavil- Michigan companies will be prepared to sell in seas trade offices, thus participants receive free offices can be a tremendous asset to exporting ions at international food shows, such as the U.S. the international marketplace. promotion of their company. companies. The state has staff in the following Food Expon Showcase in Chicago and the Festivalde To help companies compete in the world econ- Research and Education locations: Ailimentos y Bebidas in Mexico City.Well-targeted omy, the Michigan Department of Agriculture and MDA-Intemational staff also provides advice • Toronto, Canada trade shows are great places to meet potential distrib- the Michigan Jobs Corpmission have put together about exporting, limited, research and statistical • Mexico City, Mexico Continued on page 3 Sponsored by: Corn Marketing Program of Michigan • Michigan Farm Bureau • Michigan Soybean Promotion Committee A Supplement to Mi(higon Form News April 15"1991 GREEEN to meet needs of processors and growers by Fred Poston, vice provost and dean, Col- processing ventures, but also the revitalization of Michigan State University. It is essential that or food safety facilities required (0 develop a lege of Agriculture and Natural Resources, existing industries that playa key role in Michigan's MSU provide both business and technical exper- product, solve a problem or handle any other ;'c'jian State University economy. tise to new entrepreneurs and to small and medi- facet of bringing a new product (0 market. This IVI ichigan plant commodity groups and food The advisory group felt that it needed to take a um-sized companies. would be done on a consultant fee basis. processors asked Michigan State University two-pronged approach to fully address value-added The advisory group has also identified several • MSU Food Day, which would demonstrate the (0 develop a plan (0 prepare them to meet the eco- opponunities for Michigan's plant industries: potential shon-term strategies. These include: extensive faculty expertise and food facility nomic and environmental challenges of the coming 1. A long-term strategy that will allow MSU • New product development, including expanding capabilities at MSU. Participants would see century. Working with MSU, these groups devel- scientists and educators to more effectively the tan cherry market through the development postharvest processing facilities for fruits and oped GREEEN (Generating Research and Extension identify, promote and develop value-added of a cherry paste for use as a bakery product; vegetables, cereal, dairy and meat products; to meet Economic and Environmental Needs): a programs for small and medium-sized proces- revitalizing the sugar beet industry by developing and food safety and toxicology facilities asso- plan to generate new research and educational sors in Michigan. a pellet alfalfa product that would be introduced ciated with packaging, sensory evaluation, programs (0 meet a wide range of economic and 2. A shorHerm strategy to bring instant visi- into sugar beet rotation £0 improve soil health; kitchen testing, veterinary inspections, mar- environmental needs identified by growers and bility (0 the value-added programs. This is nec- remediating vomitoxin in wheat through novel ket analysis, and library and information sys- processors. essary because the latest state appropriation for processing and cooking methods; developing tems. Participants would be provided with a Plant agriculture and processing industries want GREEEN was for one-time, non-recurring funds. food and non-food value-added products from reference source of the available expertise a rapid, integrated response from MSU to develop and The projects will need to demonstrate immedi- corn starch; and developing new and improved and facilities. implement improved management programs that ate, tangible progress (0 gather support for add- packaging technologies for Michigan-grown plant No other university has structured its plant increase profitability while reducing undesirable envi- ing the funds on a recurring basis to the base products. research and educational programs this way. ronmental impacts and improving food safety. They budgets of the Michigan Agricultural Experiment • A three-phase new entrepreneur development Through GREEEN, MSU will set the standard for want research on new processing techniques that will Station and MSU Extension. program. Phase one might include an annual, integrated plant agriculture research and informa- add value to Michigan raw commodities, as well as The GREEEN Advisory Group is compiling po- one-day workshop for new entrepreneurs that tion delivery, and rapidly solve grower and proces- studies that will help them gain access £0 new markets tential project ideas (0 implement its long-term would provide information on access £0 resourc- sor problems. for current and subsequent products. strategic plan. These include: es available at MSU, as well as those available at GREEEN is a partnership between MSU, the Currently, eight projects aimed at enhancing • Hiring a food technologist with industrial experi- the federal and state levels and from private orga- Michigan Agricultural Experiment Station, MSU production of Michigan specialty crops have ence. This person will provide suppon £0 small nizations that interact with food companies. Extension, state government, the state's commodity been funded through GREEEN, including stud- and medium-sized processors, assist the director Panicipants would be given information on how groups, food processors and consumers. Capitaliz- ies on using streptomycin to control fire blight of the Food Industry Institute and act as a liaison (0 stan a food business. ing on the opponunities in Michigan's plant agricul- in apples, testing and evaluating a tunnel spray- £0 industry to address practical production con- Phase two would put phase one work- ture and processing industries has the potential (0 er for high-density fruit crops, using Bacillus cerns. shop panicipants who require specific informa- create new jobs and add millions of dollars (0 the thuringiensis transgenic potatoes to manage • Hiring a coordinator (0 assist in the development tion or problem solving in contact with appropri- state's economy. The capacity for growth exists in Colorado potato beetles, controlling bacterial of new cooperatives. The initial effon may be ate experts at MSU or elsewhere. This would be virtually every county in the state. GREEEN will and fungal diseas~s of tomatoes, evaluating al- with soybean extrusion and alfalfa pelleting in done on a consultant fee basis. allow plant agriculture and processing industries (0 ternative apple orchard management systems, the Thumb region. Phase three would locate, at MSU or reach their potential and invigorate the entire Mich- developing alternatives to Lorsband (0 control • Hiring a feasibility analyst for rapid, initial elsewhere, appropriate food processing, packing igan economy .• the onion maggot, and controlling potato late studies of proposed projects. This economist MICHIGAN STATE blight. Several new projects soon will be identi- would also help educate people about and fied as a result of a call for proposals this past promote the benefits of locating agricultural February. processing operations in renaissance and In January, the GREEEN advisory group decided empowerment zones, initially in Wayne, that the next group of funded projects should focus on value-added initiatives. The term value-added includes not only the development of new food Montcalm and Gratiot counties. • Hiring a business specialist to assist food compa- nies in interactions with business expertise at U N I v E R s I T Y MDA director announces agricultural alliance for Gratiot- Montcalm renaissance zone opment assistance in the zone. tion and expansion of value-added food and "Just like Governor Engler's renaissance zone agricultural processing," said Doug Rothwell, concept is a bold experiment in the renewal of dis- CEO and department director of the Michigan tressed communities, the formation of an agricul- Jobs Commission. "We believe that our national tural alliance is unique in forging a pannership campaigns plus their agricultural alliance efforts among independent business people and diverse will spur economic growth." agricultural organizations to help two of the poorest The farm and agricultural business leaders counties in Michigan," said Wyant. "The enormous of the alliance will identify and categorize sever- tax-free benefits of the Gratiot-Montcalm renais- al opportunities that appear appropriate for sance zone, along with the alliance guiding its pro- Gratiot and Montcalm counties. Next, the agri- motion, will attract food and agricultural value- cultural alliance must refine the business as- added processors to the area, providing much pects of the individual concepts. needed jobs and investment to the counties and "This bi-county effort is recognizing the inde- better markets for farmers." pendent hard work of many groups and now our Renaissance zones were created last year by a collective challenge is to apply our efforts and re- series of bills in which state and local taxes are vinual- sources toward projects that will lead to new invest- D an Wyant, director of the Michigan Depan- ment of Agriculture, announced the forma- tion of an "agricultural alliance" for the Gratiot- ly eliminated for up to 15 years. Several communities developed plans and submitted applications for the renaissance zone designation with 11 zones being ments and jobs," said Don Schurr and Franz Mog- dis, co-chairs of the Gratiot-Montcalm renaissance zone Committee. "Never before have we had this Montcalm renaissance zone. The alliance is com- created throughout the state on January 1,1997. many diverse agriculture-related business interests sance Zone agricultural alliance include a large posed of state and local agricultural leaders and "The Montcalm-Gratiot renaissance zone is pool their abilities to work on project possibilities, number of state and local organizations and organizations who will provide ongoing collabora- the only one in Michigan that targeted, as part we are very excited!" individuals committed to economic develop- tion and leadership on agricultural economic devel- of its economic development plan, the attrac- Members of the Gratiot-Montcalm Renais- ment in the region .• A guide for food exporters Continued from page 2 ments as NAFTAand GATT.Often, several MDA MAP,the federal Market Access Program (for- accepted quarterly. urors, and retail or food service purchasers. MDAalso divisions work together to develop "work plans" merly called MPP), makes a few million dollars avail- Other resources organizes other targeted expon promotions. that will facilitate entry for Michigan food products able as direct financial assistance to Midwest food • Cenificates of Free Sale - Food Division, Michigan Diplomatic assistance into other countries. exponers. No other U.S. product line enjoys such a Depanment of Agriculture, P.o. Box 30017, lan- When an export shipment becomes entangled in MIATCO Programs boost from the federal government! sing, MI 48909 • (517)373-9732 government bureaucracy - either stateside or in MIATCO,the Mid-America International AgO- MAPfunctions as a matching-funds program; its • Certificates of Origin - Contact your local Cham- another country - and you cannot resolve the Trade Council, has a federal budget of several mil- dollars must be spent to promote your Midwest- ber of Commerce. situation, one of your calls should be to MDA- lion dollars to promote the expon of Midwest produced food in a targeted foreign market and • Harmonized System Code - U.S. Census Bureau, International. While MDA cannot "pull strings" foods MIATCOorganizes several expon activities matched by your own dollars, or those of a foreign Commerce Department, Washington, D.C. • in another country, we may be aware of diplo- every year, and Michigan companies with relevant third party. Eligible expenses include retail and (301)457-3484 matic channels or alternatives that could help prqducts may join them for reasonable participation trade advertising, trade show booth space, in-store • Import Information - U.S. Customs Service, Trea- resolve the situation. fees. sampling and other promotional expenses. sury Depanment, 477 Michigan Ave., Ren. 200, MDA-International is also responsible for report- MIATCOalso has a free newsletter available to Up to 50 percent of these costs are reimburs- Detroit, MI 48225 • (313)226-3149 ing unfair trade practices experienced by our com- Michigan food exponers and excellent in-country able for small companiesj 33 percent for large • MIATCO - 400 W. Erie St., Ste.100, Chicago, IL panies to the agencies that negotiate such agree- resources in targeted regions. companies (> 500 employees). Applications are 60610' (312)944-7777. - Sponsored by: Corn Marketing Program of Michigan • Michigan Farm Bureau • Michigan Soybean Promotion Committee A Supplement to Mi(higon Form News April 15"1991 Corn Future developments in value-enhanced Corn Marketing Program of Michigan T he growth of the value-enhanced corn (VEC) market depends upon develop- ments occurring in two areas: the develop- ment of cost-effective merchandising vehicles their facilityis tested by a set of proprietary procedures prior [0 being unloaded. Corn not meeting their specifi- cations is rejected, and their price for corn varies with their demand for com. They raise the price to get the of producing nutritionally dense corn. Increasing lysine or other amino acid content, increasing nutri- ent bioavailability, increasing oil content or modify- ing oil composition, and the addition of synthesis (means of getting VEC to end-user) and the devel- desired flow of corn into their facility.Other dry millers pathways for nutritionally desirable compounds Earl Collier. President opment of improved types ofVEC. Continued intro- purchase corn based on density, stresS cracks or both. (such as anti-cancer or cholesterol-reducing) are The checkoff program is entering its fifth duction of innovative VEC hybrid types is vital for The wet milling industry, feed manufacturers examples of this technology. I year of operation and through checkoff market growth. and livestock feeders are also beginning to quantify One goal in this use ofVEC would be to develop funds many positive things are happening in the One of the primary technologies that will the value of consistent quality com. A major U.S. wet hybrids that contain all the nutritional requirements of corn industry. U.S. corn expons have doubled to allow for increased documentation of agronomic milling company has published to local elevators and specific animals. Different hybrids would be targeted 2.3 billion bushels annually. Plastic research de- practices is the use of global positioning systems producers a list of hybrids with higher starch yielding for different animals and even for different age/use of veloped at Michigan Biotechnology Institute has (GPS). GPS uses satellite positioning technology to potential. They also have restricted the number of animals (gestating sows vs. feeder pigs as an exam- produced biodegradable plastics from com. A allow producers to adjust agronomic practices such acceptable waxy hybrids for which they will contract. ple). By layering traits into the hybrid, more value can no- sodium no-cholesterol salt substitute from as fertilizer rate, insecticide;herbicide use and rate, Feed manufacturers are learning that particle size of be realized than by adding only one trait. The value is corn has progressed to the marketing stage. and tillage practices automatically at the time of hammer-milled corn and the resulting formula feed is in not requiring supplements to diets and reduced Research on hemp dogbane management has application. They also use GPS [0 monitor crop more uniform when consistent quality corn is pur- food;feed preparation costs. been completed and research to increase corn yields during harvest. It is anticipated that produc- chased. By combining consistency with selection of Enhanced processing value fed to dairy ca[(le has been successful. Our etha- ers will eventually be able to give a printout (or hybrids of improved value, the cost of purchasing Processors have long observed that some corn nol program is continuing and Michigan is still some form of electronic data) with each load of non-commodity corn can be more readily justified. It has better processing characteristics than others. Hard one of the largest users of ethanol for blended corn sold. The data will include the hybrid or hy- is projected that the current commodity corn system endosperm corn results in better product yields for dry fuels in the country, using some 60 million gal- brids, the chemical application rates used on the will be modified, due to market forces, to accommo- millers. Current commercial yellow dent hybrids have lons annually. Checkoff dollars have funded near- corn crop, fertilizer and application rate used and date the development of merchandising pathways for extractable starch yields that increase product value ly 20 research projects at Michigan State Universi- other agronomic practices deemed important to the specific end-use quality corn. from 36 cents to $1 per bushel. It has been estimated ty. consumer or end-user. The data generated by the A final force that will help drive corn proces- that about 70 percent of the wet milling starch yield The goal of the Corn Marketing Program of GPS will be passed through the marketing channel sors to purchase hybrids specific to their process is variability in low-temperature dried corn is due to ge- Michigan is to enhance the economic position of with the corn and will allow for easy segregation of the increased variability in hybrids due to biotech- netics and 30 percent is due to environmental factors. the state's corn producers by providing for the corn to specific user requirements based upon nology and genetic engineering. The corn proces- Enhanced product value growth and expansion of the corn industry hybrid or agronomic practices. sors will purchase value-enhanced corn as a defen- Research ofVEC hybrids is focused on the value through foreign and domestic markets. We are A second technological factor, which will in- sive measure against processing problems incurred of the resulting products after processing. For example, accomplishing thie;through development of crease the growth ofVEC, is the increasing aware- by milling corn, which will result in low milling waxy or high-amylose corn is a VEC because the char- added-value products, promotion and research. ness by end-users of the value of consistency [0 yields. If the producer received financial benefits acteristics of the resulting starch are superior to com- The corn industry wants to double the their processing operations. The poultry processing only by producing more corn, then the seed com- modity com starch for some applications. The en- value of corn by year 2002. The current crop at industry has been a leader in realizing the process- panies' only incentive is to produce higher yielding hanced value is in the product rather than in the corn. the producer level is worth about $27 billion. ing value of having consistent quality animals in hybrids, without regard to milling characteristics. A As a livestock food, waxy corn would be similar to The goal is to increase that to $40 billion dur- their facilities. Vertical integration is beginning in high-yielding hybrid that has poor milling character- regular dent. Most of the research is focused on starch ing the next six years. The Corn Marketing the beef and pork industries as well. istics could become a preferred hybrid for produc- characteristics but the research on high-oleic and other Program of Michigan will be working coopera- Certain U.S. corn processors have used selective ers. The likelihood and speed of producing such a specialty com oil fatty acids would also be included in tively with other corn-producing states to meet purchasing or contracting to acquire the type of corn poor milling hybrid has increased with the new their area. It is also possible to increase the quality of that goal and improve profitability to Michigan they desire. A major corn snack food processor has an abilities to introduce more exotic genetic material. the gluten meal or gluten feed resulting from wet mill- farmers. The corn farmers in the state can be extensive Contracting system to produce the desired The continued development of enhanced- ing by regulation of the protein composition and quali- optimistic about their future. There are more hybrids at a specified quality. A major drymilling com- value hybrids is vital to the continued growth of the ty. Other possible hybrids to enhance product value than 4,000 products available made from corn pany purchases only corn that meets their stringent VEC market. could produce in-situ extractable amino acids, organic and new products, and new markets supported processing standards. They publish yearly a list of ac- Nutritionally dense com acids or other industrial chemicals. One interesting by checkoff dollars are developing rapidly. ceptable hybrids and suggest that the corn be low- Increasing the nutritional quality of the corn concept would be to develop a hybrid that expresses This year we will be working with the Na- temperature dried. Then each load of corn delivered to crop for livestock or human food usage is the goal polylactic acid instead of starch .• tional Corn Growers Association in support of the National Genome lnitiative.1}le agriculture indus- try must suive to effidently and economically National corn genome initiative V improve corn production capabilities. By under- he National Corn Growers Association Need for immediate action - Improved yields by 3-4% standing corn's genetic code we can combat believes that the future of com is writ- Allcereal crops have related DNA gene structures. If - Resistance to diverse environmental conditions, threats from disease, pests and climate changes ten in corn's genetic code. The National Corn a foreign country identifies and patents critical genes in such as drought without harming the environment. Modem bkr Genome initiative, supported by NCGA, private sector rice, it will likelycreate a serious hurdle to u.s. variety - 20 percent increase in production efficiency technology through plant genome mapping, se- agribusiness and trade associations, calls for federal development in other cereal crops. This would adverse. within 10 years adding at least $4 billion in added quencing and trait identificatiOn holds the key to funding of $143 million over a five-year period, for corn Iyaffect research advancement in the u.s. and could farm value per year laying the groundwork for achieving this goal. We are asking Congress to fund genome mapping. A com genome map will give us the have a negative impact on U.S. producers. similar advances for other cereal crops $143 million over the next five years for the Corn particular locations of genes that control important Fa~lng benefits NCGA request for action Genome Initiative. This important research holds traits (such as streSS tolerance, resistance to disease or . Aside from protecting U.S. interests and access - Congress should set aside $10 million in Agricul- the future of the corn industry. pests, yield and nutritional value). These genes can to important biotechnology and gene patents, the tural Research Service Funds for the National Corn then be incorporated into improved crop varieties to benefits of a corn genome map include: Genome initiative. (FY98 Ag appropriations) address a diverse range of producer and consumer _ Significant reductions in crop losses and reliance - Congress should establish a new "genome map- problems and needs. To compete in the global com on pesticides ping" category within the competitively awarded More pigs, more market, U.S. agriculture must continually suive to effi- _ Improved nitrogen-use efficiency limiting poten- National Research Initiative and appropriate not corn,' more profits dently and economically improve corn production capabilities such as combating serious threats from tial for nitrates in the water supply - Improved animal nutrition leading to healthier less than $10 million. (FY98 Ag Appropriations) - Congress should ensure that not less than one-half of Yhe Michigan Pork Alliance (MPA) and the Corn cJ.iseac;e, pests, and climate changes without harming meat and increased meat productivity the research funds in the Fund for Rural America be • Marketing Program of Michigan (CMPM) the environment. Modern biotechnology through plant _ Significant reductions in environmental problems set aside for basic research projects and that priority launched an educational campaign to alert com pro- genome mapping sequencing and trait identification confronted by livestock producers, such as modi. be given to plant and animal genome mapping ducers to the profits available in the hog production holds the key to achieving this goal. fying the digestibility of phosphorus in feed corn projects. (Farm BillResearch TIde Reauthorization) • industry. "Expanding pork production in Michigan would increase the demand for corn right here in the Alternative Marketing Channels for USCorn state and that means savings in shipping cost," says Gary Krug, past president of CMPM. Four general Levell Levell! Level III Level IV Dale Rozeboom, Michigan State University swine categories of Differentiating Characteristics Identity Preserved Specialty Corns SuperlCommodity Standard/Grades specialist says, "Corn producers are natural entries into corn have been the hog producing industry. They already raise the feed delineated and are Relative Value/Premium High Medium low None and they could use their current IaOOrforce. A 1,000. described in this Buyer Control Variety MinIMax Attributes Attribute Preferences Grades Only head swine operation would need a 8,000 sq. ft. build- chart. These Production Practices ing and 15 hours a day in labor. A $150,000 invesunent categories are illustrations of Certification could realize a 10 to 15 percent profit." the types of Other Thorn Apple Valley, a major pork processor in market channels Attribute Testing Buyer's Discretion CosWalue Driven Efficient/Consistent Grade-Driven Michigan, needs 4 million hogs annually to meet its that are used to Types of Producer Contracts Acreage Production NormaVOpen Normal/Open customer demands. Michigan currently provides 2 million head. Estimates are 2 million more hogs in produce and (ProdlMerchandiser Risk) Production Bushels the state would consume 28 million bushels of corn merchandise Bushels NormaVOpen and save 25 cents a bushel in shipping costs. value-enhanced Producer Unkages High Moderate None None Sam Hines, executive vice president of the Mich- corn. Minimum Segregation Farm First Point of Sale Mercha ndiser-Determined Merchandiser-determined igan Pork Producers Association explains that "a nurs- Product Volumes low Moderate High Very High ery or fmishing operation on their farm would mean extra income to com producers." Currently, the majority of value-enhanced marketing channels provide tremendous op- cant volumes of certain value-enhanced corns For information, phone CMPM at 1-800- corn is merchandised through the Level I portunity for growth over the next five years as in the United States and export markets .• 323-6601 or MPA at 517-699-2145 .• channel. However, (he Level II and LevellII a relatively low-cost method to market signifi- Sponsored by: Corn Marketing Program of Michigan • Michigan Farm Bureau • Michigan Soybean Promotion Committee & awrn A Supplement to Mi(hiaon Form News April15~ 1991 Added-value cooperative efforts in the Thumb Michigan Soybean I L ast year, a project was initiated in Huron County to look at how the agriculture econ- the Northern Plains area. An added-value cooperative is very similar March and is now seeking memberships. Mem- berships are S500 each. The membership fees Promotion Committee omy might be enhanced within the project's to a traditional cooperative in that it is owned will be used to pay legal fees, consulting fees for guidelines. The project, "Sustaining Rural Com- and controlled by local members. However, it the feasibility and marketing plan studies, and Mary Lou Smith, President munities", was designed to foster economic developmen.t opportunities that are economical- does vary in that the members can sell and buy equity shares in the cooperative, and upon buy- product development. Discussions are underway with the Michi- F requendy, the question and answer discus- sion at many meetings involves profitable soybean production, It is generally agreed there ly feasible, environmentally sound and socially ing a share, they have the rights and the obliga- gan Soybean Promotion Board, Michigan Farm acceptable. tions of delivering a given amount of product to Bureau and Michigan State University to explore are two ways to increase profitability: reduce A series of meetings was held to identify and the cooperative. additional uses for the soybean oil. production cost and/or sell at a higher price. explore opportunities in niche marketing, crops A delegation from Huron County also attend- While the original steering committee Growers are continually challenged to find new and the dairy/livestock production areas. A num- ed a one-day added-value conference at Iowa State started in Huron County, the TOPC is involving ways to do both. While more efforts appear to be ber of possibilities were identified and informa- University. While in Iowa, they participated in a two- farmers from the entire Thumb and Saginaw on developing new, more varied uses for the tion was gathered. day training session at Triple "F" Corporation, man- Valley area. Now, there is interest in a couple of processed soybean, effortS are ongoing to ad- During an Innovative Farmer tour in Ontario, ufacturers of extrusion equipment. In addition, they other projects. dress the agronomic challenges of input costs, the group visited a soybean extruding/expelling met with a group that is developing a cooperative in A meeting was recendy held to look at aquacul- e.g., weed control, disease/msect control, variety operation in Wingard and learned about the pro- Iowa and visited an existing soybean extruding facil- ture. There is interest from the private industry to de- selection, site specific management, etc. cess. As a result of this visit, the Huron County ity in Monticello, Iowa. velop on-farm yellow perch production in the Thumb Projects that are longer term but stilladdress group proceeded to dig into this venture. Upon returning from the Iowa trip, it was area. 64 people attended the meeting to learn about production are: genetic transformation of disease Bob Boehm, Farm Bureau; Carl Osentoski, decided to move forward with the added-value the Michigan Department of Agriculture's Aquaculture resistance (white mold), soybean oil quantity/ Huron County economic development director soybean processing cooperative concept. A se- Initiative from Darwin Stith, MDA In addition, Chris quality and economically using site-specific man- and; Jim LeCureux, Huron County Extension ag ries of 11 information meetings were held in the Starr, Bay Port Aquaculture Systems Inc., reviewed their agement (SSM) in soybean production through agent participated in a three-day training session Thumb area. Sessions were held in Sanilac, Hu- yellow perch production program, areas that need the gloOOl positioning system (Gps). in Crookston, Minn. in November. The purpose of ron, Tuscola and in the SaginawlBay county further investigation for on-farm production and how Considerable human and financial resourc- the training session was to learn how to put an area. Over 600 farmers attended the meetings to farmers might be involved. es are being invested in projects designed to added-value second generation cooperative to- learn about the added-value concept and how it As a result of the soybean and aquaculture reduce your cost of production. Now, let's review gether. Speakers included project coordinators, varies from the traditional cooperative concept. projects, added-value opportunities are on the the more glamorous areas of new-use research, lawyers, CPAs, public relations directors, coopera- At the March 4 meeting, prospective mem- front burner in the Thumb area. The groups are which will lead to higher soybean prices. tive board members and consultants that have bers learned about marketing opportunities for taking a long look at the opportunities. Business The processing of soybean oil for various conducted feasibility studies. the oil, learned about the difference between plans, production research and feasibility stud- industrial applications holds considerable promise. According to Frayne Olson, assistant direc- traditional cooperatives and added-value cooper- ies are part of the new terminology on the farm. Soybean oil use in printing inks is now nationwide. tor for the Quentin Burdick Cooperative Insti- atives, and were given the opportunity to ask Hopefully, these opportunities will materialize Western Michigan University, one of the most tute at North Dakota State University, there are questions to the legal team. into productive and-profitable added-value co- respected printing/paper researchers, is annually about 100 added-value cooperatives operating, The Thumb Oilseed Producer's Coopera- opednives that will enhance the economies in funded for soyink research. Other soyoil industrial in the funding stage or in the planning stages, in tive (TO PC) was formally organized in early the rural communities of Michigan .• applications being researched are: derivatives of soyoil for paints being done at Eastern Michigan University and special processing of soyoil for roof .Pencil manufacturer makes soy crayon breakthrough coatings being researched at MSU. The MSPC is supportive of national re- D ixon Ticonderoga Corp., famous for its No.2 Ticonderoga pencil, recently unveiled what it called, "the first major advance on America's farmers, who have given us another use for the soy- bean." search on industrial soybean oil use in soy diesel fuel, solvents, lubricants, additives and, most recendy, in the manufacturing of soybean in crayons in 100 years." The soy crayons were con- oil-based coloring crayons, which will be on the This major advance is the introduction of a ceived by a group of students at market this fall. As a solvent, soyoil has demon- new crayon composed of 85 percent soybean Purdue University as part of an strated ability to dissolve spilled petroleum oil. The soybean oil replaces the petroleum oil annual contest sponsored by where environmental concerns exist and an used in standard crayons. Dixon Ticonderoga the Indiana Soybean Develop- environmentally friendly alternative is needed. claims that the soy-based crayons offer smooth- ment Council to develop new It is already EPA-approved. er, brighter colors, no flaking and are entirely uses for soybeans. Comments on soybean oil would not be biodegradable. The new soy-based cray- complete without mentioning the value-added Rick Joyce, Dixon Ticonderoga president, ons will be available in packages- opportunity of growing identity-preserved soy- says, "Not only is this a completely natural, of 4, 8, 16, 24, 48 and 64 colors, and will be beans with specialty oils of low saturate, low oleic, non-toxic oil base, it produces a clearly better marketed under the title of Prang Fun Pro Cray- low linolenic and potentially higher oil quantities. crayon. So, we are eliminating the use of a ons. The crayons should arrive in stores some- High-protein feed for animals uses 95 per- dwindling resource (petroleum), and relying time in early summer .• cent of the soybean meal produced. Research continues on this use. At MSU,a research project is on-going on protein needs of replacement heif. Soy-based solvent aids in oil spill cleanup ers. Developing additional soybean protein use A mid growing concern regarding the envi- ronmental consequences of oil spills and non-toxic and biodegradable while extracting petroleum spilled on beaches or trapped in sand ships and power plants. A single application has proven to be 50 to 90 percent effective, given research at MSUindudes soy-OOsed feeds for farm- raised fish and using soy-based concentrates in oil spill cleanup, the United Soybean Board New and gravel shorelines and vegetation," explains various conditions. reduced-fat meat products. Acomponent ~ Uses Committee is funding a soy-based biosol- New Uses Committee Chair Yvonne Wente. "The Von Wedel and his team have tested Cyto- cessed from the soymeal, called genesrein, is being venrcleaner project. The CytoSol BioSolvent, cleanup continues even after the initial applica- Sol in oil spill simulations along the California researched for preventingltreating colon cancer by developed by Dr. Randall von Wedel of CytoCul- tion, breaking down materials further and fur- coast line and the Alaskan North Slope. Reaction MSUresearchers. The processed soymea1 contains ture, is an effective agent in oil spill cleanup ther until they can be safely washed away." from emergency response agents such as game different antioxidants for researching various ef- while remaining environmentally safe. Recovered petroleum and CytoSol mix- and fish departments and the Coast Guard has fects on different cancers, lowering cholestercl and "CytoSol is unique in its ability to remain tures are suitable for recycling as burner fuel in been enthusiastic .• blood pressure, and reducing the rNts or in- al absorbers and to convert hulls to activated Using non-carbonized hulls also is a cost- compressing them into briquettes. These high- creasing price. Whether growing identity pre- metals carbons. The project, which is one of 54 efficient method of water treatment. The use of density, carbonized briquettes are superior to seMXi soys or generaI production, the mentioned domestic marketing projects funded through the hulls is inexpensive in comparison to cur- non-carbonized hulls for absorption of organic research all has a capacky {D increase profitability. the soybean checkoff program, is being over- rent treatment processes. compounds, and are similar to non-carbonized Some proiects are near lenTI, while some are long- seen by researchers from the U.S. Department Currently, ion-exchange resins are most hulls in metals uptake. er term in duration. MOSl probably, some research of Agriculture (USDA). commonly used to absorb metals and filter wa- "The briquettes are more costly than non- won't be as influential as using,sweetener marketing, vegetable processing and more. stock production services and credit are examples. • Increasing market share - In some cases, tradi- A midst of all of the enthusiasm. Combining the cooperative form of business organization with 5. Lack of member commitment If the new venture is to succeed, it must have a broad base of suppon among its members. The resurgence of cooperatives (at least as we tional cooperatives have increased market share the concept of adding value to farm products 6. Inadequate malU9tment know them in the Upper Midwest) in the late 1980s through new product development, mergers and through funher processing is NOT an automatic Choosing a manager, establishing the goals that and in the 1990s has been driven by economics, consolidations with other cooperatives and ac- formula for success. the manager should be working to achieve, and pure and simple. Opponunities are great, but suc- quisition of non-cooperative businesses. These kind of projects can work well, but they supervising the manager during the process of cessful new cooperative ventures do not spring up • Venical integration - This strategy has often can also fail. They can be done right, but they can achieving those goals are some of the most overnight. Large amounts of due diligence, time succeeded in livestock production where tradi- also be done wrong. imponant functions of a cooperative's board of and hard work precede the startup of operations. tional cooperatives suppon production facilities Below is a list of ten potential pitfalls that new directors. Characteristics of successful new-wave in hog, poultry and cattle production. Traditional cooperatives should avoid. 7. Failure to identify and minimize ~ratives: dairy and grain-marketing cooperatives have 1. Lack of a dearly identified mission risks • Value-added investment orientation to process diversified and expanded through additional A new cooperative should not be formed just New ventures are inherently risky. Risk cannot commodities into higher-value products, moving value-added processing marketing ventures. for the sake of forming a cooperative. Instead, be eliminated entirely, but it can be minimized producers funher up the food chain • Adding value and diversification - The traditional it should be formed to achieve specific goals, to some extent, once identified. • Significant out-of-pocket investment by members cooperatives have created new organizations, in- and to accomplish a mission that has been 8. OVerly qptimistic assumptIons to provide the initial equity duding new cooperatives, joint ventures and stra- clearly identified and accepted by its members. Care must De taken not to "overse I" a new • Defmed or selected membership rather than tegic alliances. They also have added services to venture with overly optimistic assumptions 2. lnadeauat. planning open membership meet the needs of rural America, such as energy Even after a mission and gOals have been iden- and speculative promises of enormous future • Long-term delivery rights and obligations of a production and distribution, telecommunications tified and accepted, detailed plans must be profits. specific commodity, with investment level tied to and information services. developed for achieving the goals and accom- delivery rights The new-wave cooperatives embody the prin- 9. Not e~h money th .. all plishing the mission. It almost always costs mOre an ongm y an- • Recognition that delivery or membership rights ciples of the Rochdale weavers established more ticipated to get a new business venture up and 3. Fallun to use advisors and have value and can be traded than 150 years ago but modified to function suc- running. Be sure that the cooperative's fmanc- • Pooling of commodities and products with ~ue- cessfully today. They are based on the successes I=~r a new cooperative to assemble ing package is adp.quate. added payments to the members only as they are of traditional cooperatives and the experience of a team of competent advisors and consultants. earned the new-wave cooperative ventures. They are 10.~~~~ m~~~Jming a new • Expansion typically funded by new investment relat- serving well in rural America and may ml a need 4. I~scrrf~~~~~m within cooperative, and also during all of the years of ed to the additional delivery or membership rights in your community .• the group, rather than from outside the group. its existence .• Michigan Farm Bureau Michigan Depanmem of Agriculture Agricultural Alliance for Gratiot. Montcalm Renaissance Zone For more information: Bob Boehm, Manager, Field Crops Dept. Roben Craig, Director, Office of Agriculture Development Don Schurr, C<>