April 22, 2016 CapitalPress.com 9 Oregon PGG board recommends dissolving co-op Members will decide at May 2 meeting By GEORGE PLAVEN EO Media Group PENDLETON, Ore. — Members of Pendleton Grain Growers will vote at a meet- ing May 2 whether to dis- solve the local farmers’ co-op, according to a letter sent to members Friday. If the motion passes, it will spell the end for PGG, which has served Eastern Oregon farmers since 1930. It’s been a tumultuous few years for the co-op, which has bled money and lopped off multiple business units trying to restore profitability. Re- tail stores closed in 2014; the agronomy division later sold to a company based in Colo- rado; and most recently, PGG has been in negotiations to sell its grain assets to multinational United Grain Corp. Now, PGG’s Board of Di- rectors is recommending dis- solution as the best course of action. That would mean sell- ing everything — grain, ener- gy, seed, transportation and the Precision Rain irrigation sub- sidiary — in order to pay off debt and have some equity left over to return to members. If growers choose not to dissolve PGG, the co-op would likely still fold and members would be less likely to recoup any equity. In the letter, which was obtained by the East Oregonian newspaper, board chair Tim Hawkins stat- ed that operating costs are too high and grain receipts too low to continue offering the same services. “The decision to move to- ward a plan of dissolution was not easy, but we believe it is the best alternative to return what equity we can over time to members and allow the busi- nesses to operate independent- ly or with partners who can bring new resources and value EO Media Group Pendleton Grain Growers, formed in 1930, has bled money in recent years and has sold or closed divisions to restore profitability. Now the PGG Board of Directors has recommended members vote to dissolve the co-op at a meeting May 2. to our Eastern Oregon farmers and families,” Hawkins wrote. PGG has 1,079 members eligible to vote May 2. At least 50 members are required for a quorum, and the resolution will need a two-thirds majority to pass. Rick Jacobson, PGG gener- al manager, insisted the co-op is not insolvent and still has support from CoBank, which extended a $15 million term loan and $20 million line of credit last June. That came on the heels of PGG losing $7.9 million in 2014, and approxi- mately $4.4 million in 2013. The co-op also discovered through an audit that it had overstated earnings by $1.8 million in 2010 and $5.7 mil- lion in 2011, according to fi- nancial statements. PGG did net $434,681 in total income in 2012. Jacobson, who was hired by PGG in 2012, said he is optimistic about getting a deal done with United Grain Corp. to sell the McNary River ter- minal, Feedville piles and 19 upcountry grain elevators, but couldn’t get into specifics. Other aspects of the business are doing well independently, he said, such as the energy di- vision and Precision Rain. But PGG is simply not bringing in enough bushels of wheat to generate a profit that will al- low it to invest in those ser- vices. Last harvest, the co-op fig- ured it would need at least 8 million bushels to continue as it has. Jacobson didn’t provide the exact number it carried, but said it fell short. “Some stayed with us, but nowhere near enough,” Jacob- son said of members. “The vote was with their bushels.” The board felt it would be best to dissolve PGG and sell off those assets to another company, Jacobson said, thus maintaining services and — hopefully — retaining jobs in the community. He said United Grain Corp. is in a good posi- tion to work with local farmers. “I think it’s the best thing to do, given the circumstances,” he said. Preston Winn, who leases about 147 acres of wheat fields near Weston, said he’s been a member of PGG for roughly 50 years. Over the years, he said, the co-op gradually lost focus on customer service, while members’ trust whittled away. Winn, who also chairs the agriculture department at Blue Mountain Community College, said PGG was slow to change in how it received, stored and handled larger shipments of grain. Instead of taking 15 minutes to unload shipments at PGG’s old coun- try elevators, he said, growers decided to turn to competi- tors that could unload them in a fraction of the time. In particular, he said Northwest Grain Growers of Walla Walla and Gavilon have both added grain piles in nearby Athena in recent years. “We’re going to go to a place that has better customer service,” Winn said. “We’re going to go to a place that can unload us in an expeditious manner.” The U.S. Department of Agriculture also pulled PGG’s warehouse license for 44 days in 2012 after discovering dis- crepancies, which Winn said shook some confidence. “I’ve heard people say, ‘I don’t think I can trust them,’” Winn said. “Anytime you don’t have confidence ... I think that’s where this fell apart.” Eric Nelson, who farms organic wheat north of Pend- leton, said losing PGG would be a hard hit to the communi- ty. The co-op has been a ma- jor supporter of local organi- zations, Nelson said, and he hopes whoever comes in car- ries that same sense of com- mitment. “It’s going to be hard to fill that hole,” Nelson said. “It’s a tough blow to the community in general.” Jacobson said the board re- alizes how difficult the deci- sion is, and carries the burden of the decision. He praised the board for its willingness to do what they feel ultimately will be the best for the member- ship. “I feel reasonably confi- dent the best will come out of this,” Jacobson said. Extension hires Utah professor as associate director By ERIC MORTENSON Capital Press A Utah State associate pro- fessor with expertise in tex- tiles and apparel design has been named associate director of Oregon State University Extension Ser- vice. Lindsey Shirley will begin work at OSU on June 1. She’ll also serve as associ- Lindsey ate provost. Shirley S h i r l e y ’s work at Utah State has branched out from textiles and apparel design to in- clude the social dynamics represented by clothing, ac- cording to an OSU news release. Among other work, she developed ways to teach design as a STEM subject, bringing science, technology, engineering and math princi- ples into the study. Online Shirley explains her teaching approach in a Utah State video: https://www.youtube. com/watch?v=FntbUNSr8c- Q&feature=youtu.be Her website: www.lind- seymshirley.com Oregon’s O&C timber counties say they’ll file suit over BLM plan By ERIC MORTENSON Capital Press An association represent- ing 18 timber-dependent counties says it will file a lawsuit over the BLM’s pro- posed new Western Oregon Resource Management Plan. “This isn’t saber rattling by us,” said Columbia Coun- ty Commissioner Tony Hyde, chair of the Association of O&C Counties. He maintains the counties were “largely ig- nored” as the BLM built the proposal. A timber industry group also might take legal action against the BLM. The Amer- ican Forest Resource Council, based in Portland, said the plan denies Oregon loggers and mills the opportunity to demonstrate how “sustain- ability, forest health and eco- nomic growth are not mutual- ly exclusive.” AFRC President Travis Jo- seph said the council’s board will decide whether to file suit over the plan. The association includes counties that receive mon- ey from timber harvests on former Oregon & California Railroad land, a checkerboard pattern covering 81 percent of the 2.5 million acres in the Western Oregon plan. The feds took it over from the rail- road long ago and the BLM manages the land. For decades, the coun- ties received half the annual timber harvest receipts and used the money to provide sheriff’s patrols, operate jails and other services. As timber harvests declined, the coun- ties received less money and drastically cut services. Voters for the most part voted down property tax increases that would have offset some of the revenue loss. The BLM’s management proposal, released this past week, sets aside 75 percent of the forestland as reserves for fish and wildlife habi- tat, stream protection and to maintain older and complex forests. The O&C counties and timber industry groups be- lieve the plan should allow more logging, which they say could revive the shattered economies in much of rural Oregon. The BLM estimates it will be able to provide 278 mil- lion board-feet of timber for harvest annually, an increase over average harvests since 1995 but far below what the O&C counties and industry groups favor. Hyde, of Columbia Coun- ty, said the O&C lands could provide 400 million to 500 million board-feet annually. “We’re not asking for ex- clusive use of these lands for revenue production,” Hyde said. “We can get higher (har- vest) levels while still provid- ing for endangered species, clean water and fish habitat,” Hyde said relations between the counties and BLM are not particularly acrimonious, but have reached the point where the plan’s legality must be challenged. Hyde and Joseph of the AFRC say the language of the 1937 O&C lands act is clear: The land is to be managed un- der a “sustained yield” princi- ple in order to provide a per- manent timber supply, protect watersheds, regulate stream flow, provide recreation and contribute to the “economic stability of local communities and industries.” The BLM maintains the proposal strikes a balance between multiple statutory mandates, including the En- dangered Species Act. The annual timber harvest is set by determining an Allowable Sale Quantity. or ASQ. The proposal, technically called a Resource Manage- ment Plan and final Environ- mental Impact Statement, covers operations in the BLM’s Coos Bay, Eugene, Medford, Roseburg, and Sa- lem Districts, and the Klam- ath Falls field office of the Lakeview District. Conservation groups have criticized the proposal as well. They say it doesn’t do enough to protect drinking water, streams, recreational activity and threatened or endangered northern spotted owls and salmon. A 30-day protest period began April 15. The BLM ex- pects to reach a final decision this summer. The Oregon O&C counties are: Benton, Clackamas, Co- lumbia, Coos, Curry, Douglas, Jackson, Josephine, Klamath, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook, Washington and Yamhill. 17-7/#5 ROP-15-4-1/#4N