2013 01 12 co-ops in wa grain econ

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NW Co-op Development Center Roles for Co-ops in the Small Grains Economy Cascadia Grains Conference Jan. 13 th , 2013 Eric Bowman, Cooperative Development Specialist [email protected] 1063 S Capitol Way # 211 Olympia, WA 98501 360.943.4241

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Page 1: 2013 01 12   co-ops in wa grain econ

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

Page 2: 2013 01 12   co-ops in wa grain econ

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

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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

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Co-ops 101

Investor owned:

Sole proprietor:

Co-ops are member:◦ Owned◦ Controlled◦ Benefited

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Corporate Structure

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• 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

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Ownership

Member-Owners can be

– Consumers– Producers/Farmers– Workers– Other Businesses

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Example Co-op Supply Chain

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Models

• Equipment Sharing• Marketing• Purchasing

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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

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Commodity Marketing

• Products sold as part of a pool

• Farmers don’t own one bushel rather part of every bushel

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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…

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• 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

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“the whole purpose is to put more money in

the pocket of the farmer”

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How?

“…hold about 500 meetings.”

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Equipment Sharing: Mobile Slaughtering

• Island Grown Farmers• 10 years & 44 members

• Puget Sound Meat• 4 years

• CPoW• >1 year

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PSMP’s member income is up 5-500%

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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

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Farm Supply: Traditional

• Volume discounts = reduced cost of inputs• Typical products:• Chemicals and fertilizer• Livestock supplies• Seed• Fuel

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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

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Why growers cooperate?

Increased access to:

1. better, more efficient machinery, technology, knowledge, etc.

2. cost savings

3. opportunities for marketing farm products

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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

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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

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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)

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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