Eric Bowman of the Northwest Cooperative Development Center presented on the roles of cooperatives in the small grains economy. He discussed different cooperative business models including equipment sharing, marketing, and purchasing cooperatives. He provided examples of successful cooperatives in these areas and explained NWCDC's process for developing new cooperatives, including identifying needs, forming a steering committee, feasibility research, and planning. Attendees learned about the economic and financial benefits cooperatives can provide small grain farmers.

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

2. 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

3. NWCDC
The 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’re
a team of co-op developers with skills specific to start-up
and organizational business development

4. Co-ops 101
Investor owned:
Sole proprietor:
Co-ops are member:
◦ Owned
◦ Controlled
◦ Benefited

5. Corporate Structure

6. • 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

7. Ownership
Member-Owners can be
– Consumers
– Producers/Farmers
– Workers
– Other Businesses

8. Example Co-op Supply Chain

10. Models
• Equipment Sharing
• Marketing
• Purchasing

11. 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

12. Commodity Marketing
• Products sold as part of a
pool
• Farmers don’t own one
bushel rather part of
every bushel

13. 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…

14. • 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

15. “the whole purpose is
to put more money in
the pocket of the
farmer”

16. How?
“…hold about 500 meetings.”

17. Equipment Sharing:
Mobile Slaughtering
• Island Grown Farmers
• 10 years & 44 members
• Puget Sound Meat
• 4 years
• CPoW
• >1 year

18. PSMP’s member income is up 5-500%

19. 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

20. Farm Supply: Traditional
• Volume discounts = reduced cost of inputs
• Typical products:
• Chemicals and fertilizer
• Livestock supplies
• Seed
• Fuel

21. 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

22. Why growers cooperate?
Increased access to:
1. better, more efficient machinery, technology,
knowledge, etc.
2. cost savings
3. opportunities for marketing farm products

23. 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

24. 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

25. 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)

26. Thank You!
Eric Bowman
eric@nwcdc.coop
Northwest Cooperative Development Center
1063 Capitol Way S # 211
Olympia, WA 98501
360.943.4241 | www.nwcdc.coop
Fostering community economic development through the
cooperative business model