2013 01 12 co-ops in wa grain econ
TRANSCRIPT
NW Co-op Development Center
Roles for Co-ops in the Small Grains Economy Cascadia Grains Conference
Jan. 13th, 2013
Eric Bowman, Cooperative Development [email protected]
1063 S Capitol Way # 211Olympia, WA 98501
360.943.4241
Roles for Co-ops in the Small Grains Economy
1. Intro
2. Overview of Co-op Business Model
3. Ag Co-ops Models
4. Development Process
5. Q&A
NWCDCThe Center
a 501(c)3 nonprofit which provides development services for new and existing co-ops
Our mission to foster community economic development through the co-op business model
We’rea team of co-op developers with skills specific to start-up and organizational business development
Co-ops 101
Investor owned:
Sole proprietor:
Co-ops are member:◦ Owned◦ Controlled◦ Benefited
Corporate Structure
• 250 purchasing co-ops procure for 50,000 businesses• 3,000 farmer co-ops market 30% of farmers’ products• 8,000 housing co-ops provide 1MM homes• 7,500 credit unions provide services to 90MM members• 1,000 rural electrics operate ½ the nation’s distribution• 29,000 co-ops serve 43% of the population
Top 100 co-ops’ 2010 revenues = $194 Billion!
Role in U.S. Economy
Ownership
Member-Owners can be
– Consumers– Producers/Farmers– Workers– Other Businesses
Example Co-op Supply Chain
Models
• Equipment Sharing• Marketing• Purchasing
Equipment Sharing Models
• Not co-op:– Custom hire agreement– Joint lease or jointly own title as individuals
• Entity/co-op owns and operates:– Individuals pay operating costs– Entity pays all costs
Commodity Marketing
• Products sold as part of a pool
• Farmers don’t own one bushel rather part of every bushel
Jon Bansen - Monmouth, OR
This is as big as I ever want to be. Working with a co-op has allowed me to produce good milk that receives a premium price, giving me a great livelihood, so I don't have any reason to want more…
• Founded in ‘05 with the purpose of marketing– Explored bricks and mortar
– Transport to markets on coast
– Recently bought a reefer van
• 7 members
• $300k in 2011 sales = 20% growth
• Customers include specialty food retailers and CSA boxes
“the whole purpose is to put more money in
the pocket of the farmer”
How?
“…hold about 500 meetings.”
Equipment Sharing: Mobile Slaughtering
• Island Grown Farmers• 10 years & 44 members
• Puget Sound Meat• 4 years
• CPoW• >1 year
PSMP’s member income is up 5-500%
Lakeside Machinery Co-op
• 7 member families• Jointly own:– 72 bins, 40-foot air drill, semi, 2 trucks, 2
combines, 2 tractors, 62-foot air seeder, tube conveyor, etc.
• Farm 12k acres together• Land individually owned• Pool grain and market together
Farm Supply: Traditional
• Volume discounts = reduced cost of inputs• Typical products:• Chemicals and fertilizer• Livestock supplies• Seed• Fuel
Farm Supply: Start up
• “locally grown/milled, certified organic, non-gmo feeds at affordable prices”
• Also:– Worm bins– Feeders and waterers– Hay, straw– Canning supplies
• 2012 - 62 inaugural members
Why growers cooperate?
Increased access to:
1. better, more efficient machinery, technology, knowledge, etc.
2. cost savings
3. opportunities for marketing farm products
When not to form an entity
• Too small to cover admin• Dependent on volunteers and/or grant• Less than 3 members• Don’t need structure• No compelling economic need
Why form an entity
Creating:• Something bigger and beyond oneself• Economy of scale• Solid foundation for growth• Legitimacy• Commitment• Limited liability• Formal structure to work together
How We Assist
• Facilitate identifying mission and goals
• Train founding Board members• Market and feasibility research• Assist with organizing• Professional, 3rd party perspective• General business consulting
Project Lifecycle
Co-op Development Stages
• Identify a need a co-op could meet
• Form Steering Committee• Research Feasibility • Review Findings (Go/No Go)• Membership Drive• Planning and Financing• Begin Operations (Go/No Go)
Thank You!
Eric [email protected]
Northwest Cooperative Development Center1063 Capitol Way S # 211 Olympia, WA 98501
360.943.4241 | www.nwcdc.coop
Fostering community economic development through the cooperative business model