Catching the Wave
As I write this message in early August, Congress is in the midst of work on
legislation to deliver some degree of financial relief to farmers who are facing
depressed prices in many commodity sectors. Other producers - particularly in
the Mid-Atlantic and Northeast states - have had to watch their crops wither
under the assault of what may become the worst drought of the century.
There is not much farmers can do about the weather, and the marketing of
commodities poses some tough challenges. But there are still many actions
producers can take to increase their probability of success. This publication
is, of course, dedicated to promoting public understanding of one of the primary
steps farmers and others can take to improve their "financial odds" in
the marketplace: creating and managing cooperatives.
Because the marketplace is ever changing, cooperatives are also evolving with
the times. That is the point of the article "Amber Waves of Change" in
this issue. This article focuses on actions being taken by Kansas wheat co-ops
to ride the wave of change, rather than be crushed by it. These co-ops are
finding ways to maximize the revenues they generate for their members' crops. New
varieties of white wheat look very promising for export markets and greater use
of market pooling is paying off for many co-ops. As Bob Gales of the FCA co-op
observes, some grain buyers have had to raise the price they pay farmers when
neighbors decide to cooperate, rather than compete with each other. This concept
is the foundation of the cooperative movement.
Another good example of Kansas co-ops pooling their marketing is discussed in
"Big Steps in the Plains," which details how four wheat co-ops have
merged their grain marketing departments and are jointly constructing a 110-rail car loadout facility. This should greatly increase the marketing clout of
the farmers who own these co-ops.
Our cover story, "A Sea of Greens," is an inspiring story about how
co-ops can also help small-scale, low-income farmers improve their lot in life
through collective action. The New North Florida Cooperative is processing and
packaging vegetables and fruits grown by its 15 members, then marketing them to
Florida schools. While the farmers were well versed in the art of growing
quality crops, they had little experience in how to add value to their crops or
in how to market them. These are the areas where USDA has been providing the
co-op with technical assistance. The co-op has so far been a great success
story.
Of course, we learn not only from our successes, but also from our failures.
That's the perspective USDA livestock and marketing co-op specialists Brad
Gherke and James Matson take in their article "Planning to Prosper,"
which examines the lessons learned from nearly a century of livestock processing
co-ops. Livestock processing remains an area of the farm economy where co-op
influence is fairly minor. But the interest level among ranchers remains
intense. They feel that they must reach farther up the food ladder to reap more
of the profits generated from livestock if they are to be successful.
Strong cooperatives are an essential part of a healthy rural economy. I hope
the articles in this issue will provide you with some ideas that will help you
strengthen your co-op.
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