Moose Lake Star Gazette - Serving Carlton and Pine Counties Since 1895

By Lois E. Johnson
Moose Lake Star-Gazette 

Co-op dissolution meeting held


February 15, 2018

Lois E. Johnson

The feed mill, now owned by Federated Co-ops, in Moose Lake is being dismantled to make way for a store to sell lawnmowers and snowblowers.

Members of the Moose Lake Cooperative Association voted to dissolve the cooperative at a special meeting of the members on Wednesday, February 7, at Hope Lutheran Church, Moose Lake. The final vote count was 79 "yes" and seven "no." Absentee ballots were included in the final vote count.

Before members voted, Al Overland, chairman of the board of directors, told the 35 members in attendance, "All of you know why we are here. The cooperative has been dear to many of us, very special. We are here to answer all the questions that we can before we vote."

Richard Olson, an attorney for the cooperative, informed the members the proceeds from the three businesses the cooperative owned - the gas station, the feed store and the fertilizer warehouse and equipment - resulted in enough funds to pay off a long-term loan.

A smaller short-term loan and all other bills will be paid off before March 1, Overland later reported.

Olson said the Moose Lake Cooperative was forced into the liquidation of assets by Cobank, who held the loans.

"I commend the board for taking the action that they didn't want to take," he said.

However, Olson was quick to point out, even though the cooperative had to take that action, it was a good move.

"This is as good an ending as we could ever hope for," he said. "The cooperative obtained a reasonable dollar price for those assets and the members will receive their patronage equity."

One of the members stated he saw this coming five years ago. "Changes should have been made five, 10 or 15 years ago," he said.

"What's happened here is not unusual," Olson answered. "But it is unfortunate. This is a very difficult time for cooperatives."

When asked about the feed store in Askov and the business in International Falls that the cooperative had owned, Overland answered, "We acquired the feed store in Askov when they were in dire straits," he said. "We took over and bought their buildings. Those buildings now are for sale. In International Falls, we delivered supplies to a veterinarian there. He retired, and a woman that worked for him wanted to keep his pet food business going. We rented a place up there, set up the operation and gave that a try.

"She bought the inventory and the store is still running. She was still getting products from us."

Olson explained that Federated Co-ops has purchased the gas station, feed store and fertilizer plant, and the members will be able to build equity with those businesses.

"This is not the end of the world," he said. "You will still have the opportunity to be a member of a cooperative that is serving the community."

Overland explained other reasons why the cooperative came to this point.

"Our accounting system was closed down," he said. "The new accounting system was very difficult to work with. There was a period of eight or nine months where we had no idea where we were financially. We also had a hard time with commodity prices. It was a wet year and we couldn't sell fertilizer. Farmers couldn't drive in their fields.

"I have been farming for 42 years. I used to have to call three or four days in advance when I ordered feed. At the end, I could call and get it the same day. We lost that many farmers. When you lose a good business that needs feed, that's hard to make up.

"Kwik Trip came in and we lost sales at the gas station. There was another cooperative that we were invested in that had less returns. You put all of those things together and it wasn't going to work."

It was asked why the cooperative made a large investment in purchasing new vehicles and equipment several years ago.

"We were trying to grow the business," said Overland. "I know why we made those decisions at the time. Did they turn out well? No, they didn't. We did not know there would be a downturn in the economy. You can't run an operation like that for 10 or 12 farmers."

In a separate telephone interview, Overland said that the auction sales on February 17 are to sell the equipment the cooperative still owns.

He also said rumors that an employee embezzled funds has no foundation.

"We did not find anything questionable in the records," he said.

Overland is the third generation in his family that was served by the cooperative. He spoke about his grandfather, Sievert, who used to sit in the window of the grocery store in the mornings and talk to people that came in. His aunt, Laura Nelson, worked in the clothing department of that store. His dad, Alfred, was also a member of the cooperative.

"I got on the board in 1979," he said. "One of my first actions as secretary was to sign the papers to close the grocery, clothing and hardware store. There was also an appliance store in another location.

"It is sad for all of us that the Moose Lake Cooperative had to close. However, this was inevitable. Many small farms are moving out of the business. Even under good management, it was unlikely that we could keep going.

"We got out at a good time. We are able to pay off all of our loans and patronage equity. There should also be an excess that will be paid in proportion to the amount of equity that the members had in the co-op."


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