Co-op to close after 62 years Southern States plans to keep three other county stores open

November 17, 1996|By Joanne E. Morvay | Joanne E. Morvay,CONTRIBUTING WRITER

Southern States Cooperative -- an apparent casualty of increased suburban growth and a dwindling number of family farms in Carroll -- is expected to close its Westminster store by the end of the year.

Three other county cooperatives -- in Hampstead, Taneytown and Mount Airy -- will remain open, as will the affiliated Carroll Petroleum Service in Westminster, according to officials at the company's Richmond, Va., headquarters.

District Manager Jim McCarron said the remaining locations and a fourth in the Frederick County community of Woodsboro are expected to serve former Westminster customers with "as good or better service than we ever had."

Some local board members and patrons have said privately that emotions in the farm community are running high over the decision to close the 62-year-old cooperative and the loss -- over the past seven years -- of much of the members' equity.

Farmers become co-op members by committing to a certain amount of business with Southern States each year. In profitable years, members receive dividend checks and co-op stock.

The Westminster co-op has not turned a profit since 1990 -- though the financial picture appeared to be improving. According to the co-op's 1995 annual report, the volume of business was $3.2 million, with a loss of $175,287. In 1994, the co-op did $3.1 million in business and ended the year with a loss of $351,117.

The cooperative's debt stands at $2.4 million. McCarron said members' equity has been reduced to the value of the real estate the co-op owns, property that members chose to purchase during profitable years in the 1960s. The feed mill and store are on a 3-acre site at John Street and Englar Road. The fertilizer plant along Railroad Avenue is on 1.9 acres.

Southern States is having those properties appraised. The Westminster co-op also owns 2 acres in Union Bridge. That site has been on the market since the Southern States feed mill and store there closed in 1994.

Barry High, chairman of the Westminster co-op, said continuing losses -- coupled with the condition of the fertilizer plant, which would be expensive to upgrade to meet state and federal regulations -- left closing as the only choice members have to cover debt and retain any equity.

Co-op members will meet Dec. 13 to vote on the closure. Both the local board and corporate staff in Richmond are encouraging them to vote in favor of the shutdown.

High said previous poor management and investments recommended by corporate officials in Richmond have played a role in the co-op's demise.

When the Taneytown co-op's feed mill closed in 1992, Westminster members expected an increase in business that never materialized, he said. And a much-lauded "ag service" proposal to dispatch fertilizer spray trucks and other equipment to Carroll County stores from Westminster never got off the ground because of bickering among store managers, High said.

Some local board members, High said, are angry at Southern States corporate leaders. He said he and some other directors believe the co-op could have turned a profit in another year or two under its current manager, Chris Wilson.

High said, however, that there is no way to solve the problems of the aged fertilizer plant. Fertilizer, pesticide and herbicide sales and service continue to make up the bulk of Southern States' business.

If members refuse to vote for the closure, the Westminster store and feed mill could still operate. But High said he believes it would delay the inevitable for the co-op. And members' equity would probably disappear.

McCarron said Southern States expects to move the nine full-time employees of the Westminster co-op to other locations in the county.

Calling the Westminster closing one of the toughest of his career, McCarron said Southern States' distribution network -- once dependent on "a local co-op in every town" -- is no longer efficient.

"You look across America and see businesses consolidating every day, becoming leaner and meaner," McCarron said. "We're no different."

Pub Date: 11/17/96

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