Stop, Cooperate, and Listen: Three Things You Need to Know About CooperativesShare
When I share with people that I interned with Land O’Lakes this summer, their first comment is always “Oh yeah, the butter company!” While we are “the butter company,” that butter company is one that is a farmer-owned cooperative, which is something I have always found unique. Growing up in rural, northwest Indiana, I had heard the term “co-op” in reference to the local ag retailer, electric company and feed mill. Although I learned about cooperatives in my high school agri-business class, my ideas of them changed as we visited Mid-Kansas Cooperative in Central Kansas. So, to save you a plane ticket and lots of Kansas heat, here are three things you need to know about cooperatives!
Cooperatives are owned by members
When it comes to ownership in Mid-Kansas Cooperative (MKC), farmers simply spent a minimum dollar amount at the co-op and were then qualified to be members. This purchase could be seed, fertilizer or chemicals, grain handling and much more. Because these farmers are then “owners,” they receive patronage, or a portion of the co-op’s profits, back each year. As a college kid, it makes me wonder how much I could earn back if, say, TJ-Maxx was a cooperative!
Co-ops are much more diverse than you think
As we visited with MKC employees, we all chuckled and agreed that at one point we had referred to our local cooperative as the “stinky grain elevator.” In Kansas, however, I learned that a cooperative is so much more than that. I was amazed by the diversity of MKC. Not only is it a full-service agricultural retailer that offers support and guidance through the entire agronomic growing season, but it also has grain, energy and feed-based business units that allow members to receive all their inputs in one place. Outside of MKC, cooperatives come in nearly all industries. My family purchases electricity from the Indiana Electric Cooperative, we heat our house with a gas furnace fueled by cooperative and we buy butter from Land O'Lakes, also a cooperative. My parents aren’t farmers, but I have daily interaction with the products of cooperatives, and I bet you do, too!
Being part of a co-op allows members to have better market access
Land O’Lakes, Inc. was originally founded by Minnesota dairy farmers who wanted to sell their sweet cream butter to the East Coast. As individual farmers, they couldn't do it alone, but they worked together, and as a cooperative, developed more power in the markets.
MKC has found access to similar market share by starting a grain marketing alliance. With professionals specifically focused on grain marketing, crop insurance and brokerage, MKC members have access to the best opportunities and grain prices. For example, an individual farmer may not have the resources to ship wheat across the country or even trade internationally, but as a cooperative member, that farmer can take advantage of trains and ships leaving weekly to take their Kansas grain across the world.
The value I have gained in working for and learning about the cooperative system has opened my eyes as a consumer and as a young adult entering the workforce. During your next trip to the career fair, down the grocery store aisle or along the main street in your town, I encourage you to pay more attention to those companies and the members they are serving.