Farmers and Ranchers Thrive in the Cooperative System


Local. It’s one of the hottest trends in recent years. But that trend was set in communities across rural America nearly 100 years ago when the first local cooperatives opened their doors to provide the services, products and markets local farmers and ranchers needed to thrive.

Local co-ops worked to fill the gaps left by private businesses that were unwilling or unable to weather the economic ups and downs of agriculture. And they sought to put farmers, as a group, on the same footing as those businesses, with the same clout in the marketplace and the same voice on Capitol Hill.

Owned and controlled by the producers who do business with it, there’s nothing more local than a local cooperative.

“I look for my co-op to be at the leading edge of its business, whether that’s agronomy, feed, energy or grain,” says Luke Kuster, a producer from eastern North Dakota and member and director of CHS Ag Services. “I look for it to be competitive in price, but also to set direction for other companies to follow. I can’t imagine what our communities would look like without co-ops.”

When Diane Franzeen’s first husband died in an accident, she knew she’d continue farming with her young children. “When I had questions, the co-op team was there for me. I knew I could turn to them for answers. They were friendly, efficient, dependable and always advancing their technology. The same holds true today.” She now operates hog-finishing, steer-finishing and crop enterprises in an array of partnerships with her husband, son, brother and nephew near Arlington, Minn.

Eric Anderson, general manager of Northern Partners based in Mendota, Ill., agrees that co-ops play a large role in the communities they serve. “We exist for the sole benefit of our members. Yes, we have to be competitive, but if we’re profitable, that money stays in our local community through patronage, investment in the business or stewardship.”

Ag has changed dramatically, says Chuck Conner, president and CEO of the National Council of Farmer Cooperatives, but among modern-day producers, the need for cooperatives is “every bit as great as it was at the early part of the last century. Producers still need co-ops to provide the services and functions they would have a hard time doing themselves.”

Such cooperative services include functions like building unit-train facilities to handle grain, developing domestic and international markets for commodities, providing a reliable supply of inputs, and sharing the product expertise producers need to raise crops and livestock.

Embracing local
Local is in a cooperative’s genetic makeup. Unlike many other organizations, every co-op starts with a group of like-minded people who have a shared need. With farmers, the need was often for reliable fuel supplies or market access. From those early beginnings, the key principles of a cooperative began to take shape:

  • Owned by the people who use it
  • Governed democratically by the people who use it
  • Benefits generated by the co-op returned to the owners on the basis of use

The producer-members elect directors from the membership. The directors, in turn, hire a manager and provide direction for the co-op.

Having a local board of directors differentiates cooperatives from multinational competitors, says Jim Morken, general manager of CHS Farmers Alliance in Mitchell, South Dakota. “They serve as business advisors, providing the input to help us make decisions based on the needs of local producers.”

Since 1994, Franzeen has carved time out of her busy farm-and-family schedule to serve on co-op boards and committees. To serve in that capacity requires a special commitment, she says. “You must have a passion for agriculture and your co-op, be prepared to spend time continually learning and growing as a board member, and help make the decisions to keep the co-op moving forward, while protecting patron equity.”

One of the most important things a board does is hire a manager, says Joe Zumwalt, farmer and former director of Ursa (Ill.) Farmers Co-op. “Management is a huge factor in maintaining the economic viability of your co-op, seeking out opportunities and ensuring it remains relevant to producers.”

Joining forces for impact
While retaining local ownership and control, cooperatives join forces to form regional cooperatives—like CHS—to have an even larger impact and bring greater benefits to members.

Through a regional cooperative, member cooperatives and their local members gain size, scale and speed in an ever-changing global economy. But they also retain a voice in the organization: Local producers nominate and elect directors to represent their areas on the regional cooperative board.

“To remain relevant as a cooperative, both locally and as CHS, we have to seek out the best talent and cutting-edge technologies and make the investments that will keep us ahead of the curve for the largest producers,” says Lynden Johnson, executive vice president, CHS Country Operations. “And as a cooperative, all we do is on behalf of our owners—every day.”

Hometown investment
Every community that is home to a cooperative benefits in a host of ways. The co-op employs local residents, buys new equipment from local businesses and invests in new facilities, hiring local firms to do the work.

“We’re part of the community; most of the people who work here are from the communities we serve, and we’re active in supporting causes in our communities,” says Northern Partners’ Anderson.

From supporting youth soccer, baseball and softball teams and raising money for local food shelves to advising local FFA chapters and bidding on 4-H’ers’ animals at county fairs, cooperatives are embedded in their communities.

Local cooperatives raise a united voice to represent farmers’ interests in shaping state, local and national policy, coming together for the benefit of all. Local ownership and local control, with global reach—it’s the win-win of mutual success.

—This article was originally published by CHS Inc. 

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