Newspaper article THE JOURNAL RECORD

Farmers Grow into the Food-Processing Business about 70 "New Generation" Cooperatives Spring Up across Oklahoma and the Rest of the Upper Midwest Region

Newspaper article THE JOURNAL RECORD

Farmers Grow into the Food-Processing Business about 70 "New Generation" Cooperatives Spring Up across Oklahoma and the Rest of the Upper Midwest Region

Article excerpt

WICHITA -- The system has always been that Ray Crumbaker grew the wheat and somebody else processed it into flour and bread, which yet other people sold. Profits from the wheat were dissipated.

Now, farmer Crumbaker and many of his colleagues from Oklahoma and other neighboring states are expanding their profits by going into the food-processing business, pooling resources to buy manufacturing facilities to turn their raw crops into consumer goods.

About 100 of the "new generation" cooperatives have sprung up across the nation, with 70 in the upper Midwest, said Mike Cook, professor of agriculture economics at the University of Missouri. The idea was born in 1973 with the closure of a Minnesota sugar mill. Stranded sugar beet growers decided to open their own mill. A few other farmers tried similar projects, but the idea didn't catch on widely until the 1990s, as farmers who struggled through the 1980s went looking for other income sources, Cook said. Now, cooperatives are manufacturing products from kosher beef to ethanol fuel. With federal farm subsidy payments threatened and farmers always in the market for more money, the Kansas Association of Wheat Growers began considering in 1995 creation of its own new-generation cooperative. "We really don't get to set our own price as manufacturers do," said Crumbaker, the association's vice president, who grows wheat in Brewster, a town in northwest Kansas. "We started looking at the entire food system.... We're the backbone of it, so why can't we get farther up?" About a year ago, the 21st Century Alliance Inc. was born, an organization of 575 farmers from Oklahoma, Kansas, Nebraska, Colorado and Texas. Farmers must pay an initial fee of $750 to join, with the money used for research into product development. The alliance is in the process of buying its first business -- a flour mill in Rincon, N.M. Beginning in April, alliance members will be able to buy the right to deliver 2,850 bushels or more of wheat to the cooperative for a minimum price of $5,000. The New Mexico mill will grind the wheat into flour, sell the finished product and pay the farmer both for the wheat and a portion of the money earned from the processed wheat. …

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