Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, November 17, 1994                   TAG: 9411170096
SECTION: BUSINESS                    PAGE: B6   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND                                 LENGTH: Medium

FARMERS CO-OP SPLITS ITS SEEDS

Farmer-owned Southern States Cooperative Inc. is reaching out for city customers with a new division specializing in the garden supplies market.

Southern States is best known for its rural stores, including those in Western Virginia, selling farm supplies ranging from seed and fertilizer to specialized equipment. But it also has urban and suburban stores focusing on garden supplies.

The Richmond-based cooperative had previously handled all its stores as a single unit.

Separating the two groups means ``we'll be able to concentrate more on our ag business,'' said Gene James, president and chief executive officer. He made the comment at the co-op's annual meeting this week.

Co-op Chairman Galen B. Brubaker, a Rocky Mount dairy farmer, said that while the division would allow Southern States to focus on new business prospects, it did not mean Southern States was losing interest in its rural business.

``We will take advantage of opportunities in urban areas,'' Brubaker said. ``The income they generate will bolster our ability to serve our members.''

Southern States operates in Delaware, Kentucky, Maryland, North Carolina, Virginia and West Virginia. It is owned by farmers who use Southern States' services or who supply goods to it.

Southern States reported a record sales volume for the fiscal year ended June 30, but its earnings fell 20 percent because it did not receive a dividend from its CF Industries Inc. fertilizer operation. CF's dividend last year was $3.8 million.

The cooperative cut its refund to members to $2.8 million for the past year, down from $3.8 million the year before.

``Had it not been for predictable declines in two of our very important businesses - petroleum sales and grain marketing - we undoubtedly would have established an even higher sales volume,'' James said.

Sales of its farmer-members' grain were cut by the 1993 drought, while petroleum sales were down because the co-op decided to stop its marginal commercial sales to outside dealers and concentrate on selling fuel through its branches.

But Southern States' animal feed sales rose for the fourth consecutive year, climbing 11.7 percent to $163.6 million. Swine and horse feed were among the biggest percentage gainers.

Fertilizer sales rose 11.1 percent to $143.5 million, seed sales rose 2.2 percent to $44.9 million, while sales of other farm supplies rose 6.9 percent to $160 million.