Mega Cooperative

[smokeyjay]

OKdon, a good cooperative will take care of owners equity, retiring stock on a regular basis, so they will not risk operating capital in the long term. If owners are not receiving stock payments from ten years out, it raises a red flag. Any coop that is current will be an attractive merger partner, which is not necessarily a bad thing. It is well managed. 

[WCMO]

The larger a coop becomes, the less "coop-like" it becomes.  As you've said, it operates more like any other large business.  Unfortunately, the farmer-customers might become less well-served, and the farmer-customers ARE the stockholder-owners.  Large cooperatives seem to operate more like the management is the owner.  When our local coop was small and local, the board of directors actually had some influence, made real decisions, etc.  As the coop grew, the local board had much less understanding of operations, and much less influence, while the nominating committees became much more inclined to just rubber-stamp whoever management seemed to want on the board.  Now, the local board is simply an 'advisery committee' with no actual say in anything, don't even know who is on it anymore, might even include me.  Delegates are elected to attend the regional and annual meetings, but don't really know what is going on until they hear whatever is said at the actual meetings, no real thought given to what the information means (too much info in too little time), just a big yay or nay in unison from the crowd of delegates, based on whatever the management said.  Don't even know who our local delegates are any more, and again, might even include me -- they have a free-feed and election ballots each year, but they don't even publicize the results anymore, just get a letter whenever it's that time of the year for a meeting.  Other than whatever regulatory benefits there are from being a 'coop', would we be better off to change to regular corporate status, issue stock ownership certificates based on retained earnings, and just operate like the large business the coop has become?

And, just curious, what happens to the non-patronage earnings from related businesses owned by the coop?  Who owns those earnings?  For example, a large coop buys a group of elevators in another location, but the new location does not get credit for patronage?  Another example, a large coop buys or owns an oil company that distributes to non-farmers who are not considered coop owners nor patrons for ownership and dividend purposes -- who owns those earnings?

[BA Deere]

I don`t know exactly what you`re asking, but if a coop has a fuel "cardtrol" that non-members use.  I`ve seen where the profits go to charitable organizations in the community, plus if you use the coop`s card, you might get 6¢ per gallon off.

But, perhaps coops are a thing of the past, there are big farmers that sell and apply fertilizer and chemicals as a sideline business and they are always cheaper than the coop.  There are ethanol plants, feedlots and soybean meal processors that one can market his grain to and there again their bids are usually higher than the coop. 

[WCMO]

Not really asking anything, just a 40-year observation, a signficant part of which was in working for a cooperative, and the rest being a member of a few of them, serving on nominating committees, advisary boards, voting delegate, etc.  Also, reflecting on some of the above comments relative to seeing my folks still receiving some payments from retained coop earnings while working on their taxes -- folks haven't had any operating farm income/expenses for nearly 20 years.