by George Looby, DVM
While students enjoy their spring break, the Rome Ballroom at the University of Connecticut in Storrs, CT becomes available for a variety of activities geared to groups outside the student body. It was in this setting that several university groups collaborated to present a meeting titled, “Collaborations for Agricultural Profitability.” To develop this program, three departments within the College of Agriculture and Natural Resources collaborated to bring in speakers with expertise in a variety of areas that relate directly to marketing and promotion. The Department of Extension, Department of Agricultural and Resource Economics, and the Zwick Center for Food and Resource Policy developed an informative session designed to stimulate those in the industry to take a hard look at their own management and marketing programs.
The March 18 meeting kicked off with welcoming remarks by Dean Gregory Weidemann, who reinforced the close ties that exist between the College of Agriculture and Natural Resources and the state’s agricultural community. The dean was followed by Steven K. Reviczky, commissioner of agriculture, who reviewed changes taking place at the Regional Market and ways it could be better organized and utilized. One project in the offing at that facility is the construction of a food processing center where farmers can come to process their produce in order that it be market ready. In addition, the department has grant money available that can be used to establish such centers in convenient locations around the state.
Dr. Lynda Brushett of the Cooperative Development Center (CDC) led off the morning program discussing the topic, “Why Farmers Cooperate.” The CDC, located in Shelburne Falls, MA was founded in 1994 by a diverse group of cooperative leaders with the mission of building vibrant economies through the creation of cooperative businesses throughout New England and New York. It is Dr. Brushett’s contention that farmers cooperate to access markets and product services they cannot access on their own, hopefully improving their bottom line and economic power. A farmer co-op can be developed in such a way as to provide as many or as few services as the members wish to have. Co-ops, properly structured, can reduce operating costs and increase overall efficiency by joint purchasing and pooling labor on a seasonal basis, develop storage facilities that can be shared, and develop good marketing strategies.
Co-ops offer protection from certain legal maneuverings that occur in the business world, an example being anti-trust laws. In the eyes of the system, a co-op is an autonomous association of people. A co-op is a group of members who elect a board of directors, which in turn hires a manager who hires a staff. Each level reports to the level above.
As with any organized group, there are a series of steps that a group must go through to organize a cooperative. Once organized there must be well defined goals, good management and a board that is dedicated, governs in a business-like manner and has a high level of transparency.
Following the opening presentation there was a panel discussion with participants Gary Gemme, Lynda Brushett, Tim Higham and Forrest E. Stegelin. Gary is co-owner of Harvest Farms in Whately, MA concentrating on kale and collards. He is a member of the Pioneer Valley Growers Association, a group of approximately 80 growers located in the Connecticut River Valley. It was started in 1978 by eight growers with sales of $52,000 in 1981, growing to sales of between 1.8 million and 3.2 million over the past 10 years. The co-op markets to most of the large New England supermarket chains as well as small independents, farmstands and to more distant markets if market conditions warrant.
Shipping represents a major cost for growers and to address this issue, Tim Higham of the Interstate Logistics Group offered some solutions. There are certain things that shippers expect when negotiating with freight firms. Among these are low freight costs, predictable and stable freight costs, on-time drivers and carriers, and low claims for losses. Some of these factors are beyond complete control but can be lessened with better oversight. There are some creative solutions that should be investigated to best meet the needs of each producer. One of these is to own your own trucking company. By doing this, you should have immediate access to trucks as needed. On the other side of the coin is cost. The potential liability and the management side are potential nightmares, according to Higham. A group of growers can jointly form a trucking unit, which would allow ready access to trucks, but on the downside it detracts from each owner’s core business, adding another layer of management which may not be cost effective.
Following a break for lunch, participants had the option to attend and participate in one of four breakout sessions moderated by the morning speakers. Gary Gemme hosted one group where the topic was steps necessary to design and start a member owned business.Tim Higham hosted another where his group discussed ways in which to reduce input costs through collaborative buying. Guiding another group through the ways in which it is possible to grow a collaborative business was Bob Wellington of Agrimark. A fourth group discussed the opportunities and challenges in group marketing with Forrest Stegelin.
Bob Wellington, senior vice president of economics, communications and legislative affairs for Agrimark, presented the audience with a history of milk cooperatives in New England and the way in which his organization became the preeminent dairy co-op in the region. Co-ops came into being in the teen years of the last century and began their decline in the 1960s, as the way in which milk reached the customer began its change.
Margaret Chatey, marketing communications specialist for the Connecticut Farm Bureau, closed the days program by reinforcing the Farm Bureau’s support of programs such as this and its willingness to assist in any way that it can in promoting farm profitability.
Collaborations for agricultural profitability
by George Looby, DVM