1/4

@

Short Schedule Farm/Company

Name: Agriculture cooperative “Straupe” Web site: http://www.straupespiens.lv E-mail: pks.straupe@inbox.lv

Place

Country: Latvia Region: Vidzeme City: Straupe

Product Type Milk, butter

Reference year 2009

2.3.4. Straupe

Farm description

Start point/Challange

Successful elements

Output/Effects

Distribution channels

Description

Milk production in Straupe has long time history. The Straupe milk factory was built in 1911, and the first farmers’ cooperative was founded in Straupe in 1913. When the independence of Latvia was gained in 1993 the Straupe milk factory was passed over to a newly founded cooperative of local farmers. The milk farms of the cooperative (sized from 2 to 200 cattle) are placed 20-25km around Straupe. The membership of the cooperative in 2009 is 126 farms. The amount of milk purchased by the cooperative daily is 25-30t. The production of Straupe (primarily milk and butter) is consumed by customers in Straupe, Riga, Sigulda, Cesis and Valmiera towns. The main goal of the cooperative is to help Straupe members with quality issues and to optimize the resources for gaining maximum income.

- Direct sale - Farmers’ Markets - Collective shops - Partnerships and cooperation

Key Words

A farmers’ cooperative has been able to develop their own sales network of small shops and markets, and thus has been able to pay their members significantly higher prices for their produce.

Why is the topic

interesting?

Straupe

Start Point

Farm description The cooperative has focused on high quality milk produce.

Start point/Challange The involvement of the membership is facilitated by

motivating mechanisms – financial benefits, common sense of a common goal and strong feeling of local community. Successful elements

Since the foundation of the cooperative, the number of members has diminished twice, but the amount of milk purchased has grown twice, i.e., the average farm in cooperative has grown and gained effectiveness.

Output/Effects

Challenge

RECALL!

Establishing farmers

‘own distribution

GLOSSARY:

CARAWAY CHEESE Caraway cheese is made of skimmed milk curds, cream, butter and caraway

seeds.-

Agriculture produce market is full of challenges. The food and, particularly, milk prices have fluctuated radically in Latvia and Europe within 2 years. In 2007 and beginning of 2008 the milk prices were high, but price started to drop in 2008, and has not reached the lowest point yet. Also, due to general economic crisis the farmers face grave challenges – shortage of loans, consumers are buying less, etc. Straupe cooperative faces the following challenges: - Finding consumers for its produce. The biggest

challenge –for the 25% produce surplus, customers regularly have to be found among other milk factories;

- Maintaining prices for the raw produce to be motivating for its members;

- Maintaining prices for the end production to be competitive in the market;

- Making ends meet in the new economic conditions.

2/4

3/4

Straupe

Success elements

Straupe has positioned its produce as the farmers’ own high quality produce. Farm description Consolidating resources of many individual farms has been the way to make management, public relations, marketing and service expenses cost effective.

Start point/Challange

Successful elements In order to ensure high quality produce, the cooperative has helped the members to meet the requirements, for example, finance milk coolers for the members. Twice a month the cooperative tests the quality of each farmers produce. The quality data is taken into account in determining the price of the produce. Thus, farmers are motivated to ensure very high quality produce.

Output/Effects

IN EVIDENCE Cooperative shops are operating in Straupe, Valmiera, Cesis, Riga, Sigulda and four Riga markets. The shopping stalls and shops of the cooperative have excellent sales results and many regular long term customers. A highly popular local market in Straupe attracts customers even from distant places of Latvia. Thus, the cooperative is in charge of the whole chain of production and sales, and receives full profit, avoiding intermediates. Half of the produce of Straupes’ cooperative is sold through their own distribution channels. Informal information channels, word of mouth, have served to raise the demand for the Straupe’s production.

In order to meet the customer needs and adopt the new economical conditions, the Straupe Cooperative has established the following procedures:

Also, the produce is sold in several supermarkets chains. However, the cooperative management consider that selling produce in the supermarket chains is not profitable in comparison to their own sales places, since supermarkets demand a constant supply of large amounts, and keep a large percentage of revenues. Also, sales in cooperatives’ own shops secure fast flow of money, which is important for the financial stability of the operation. Sales in the supermarkets do not allow direct contact with the customer, which is important for getting feedback on the quality and improving the operation.

1. High hygiene standards for production and processing of organic milk and beef meat 2. Regular control of the each farmers produce quality 3. Providing the members with sales opportunities

4. Owning shops in several places and making contracts for other products sales (bread, meat etc.)

E X E R C I S E S DEVELOPEMNET SHORT QUESTIONAIRE FOR THE CUSTOMERS AND MEMEBERS OF COOPERATIVE

4/4

Straupe

Output/Effects

Farm description

Start point/Challange

Successful elements

Output/Effects

As a consequence, Straupe has been able to keep the purchase prices for its member farms comparatively high, when general drop of milk prices in Latvia takes place, and many farmers do leave the business. The purchase price in Straupe in the first half of 2009 was twice as high as generally in Latvia.

The long term cooperation of the Straupe farmers and sense of belonging to the local community has proved itself to be very successful.

Caraway cheese, which got the title “King of Cheese”.

Discussion Questions/Remarks 1. What kind of requirements the farmers should follow in order to produce

organic milk and meet? 2. What are the steps/procedures in order to organize direct sales? 3. What kind of economical conditions are important for development of farm

business?

Further investigations www.straupespiens.lv http://www.laukutikls.lv/index.php?option=com_content&view=article&id=313:piensaimnieku-kooperatv-sabiedrba-straupe&catid=71:nlo-lauksaimniecibas-

kooperativi&Itemid=65

K e y p o i n t s f o r t r a n s f e r a b i l i t y

DEVELOPEMNET SHORT QUESTIONAIRE FOR THE CUSTOMERS AND MEMBERS OF COOPERATIVENICHE PRODUCTS