INDIANAPOLIS, Ind. – The Organic Valley brand has brought together farmers from 1,800 operations across 35 states and generated $970 million in sales last year, said spokesperson Jerry McGeorge, at last week’s Crossroads Cooperative Summit in Indianapolis.
The cooperative model has worked well for Organic Valley farmers, who have seen marked growth in the last 17 years, said McGeorge, director of cooperative affairs with CROPP Cooperative. Seventeen years ago, sales totaled $20 million from 150 farms. Based in the small town of LaFarge, Wis., the co-op battles for the top price for its organic dairy farmers, who secured $30 per 100 pounds, compared to conventional producers who received $20 per 100 pounds, McGeorge said.
"The power of numbers allows us to go to retailers, and customers ask for us by name," McGeorge said.
The cooperative model also allows farmers to farm the way they want to, McGeorge said. When the co-op began in 1988, it was on a small scale in response to a big crisis, he explained. About 90 percent of Organic Valley sales are from dairy products. "In the late 1980s a farm crisis was going on, and farmers had to get bigger or get out. Many wanted to continue to farm on a smaller scale as they had been doing for generations," McGeorge told Farm World.
"Farmers were tired of other people making decisions for them. In a cooperative model, farmers have a meaningful voice in board meetings and on committees as they set production standards and policies," McGeorge said.
Co-ops are not new to the ag community, said Mike Turner, general manager of Illini FS, a retail division of Growmark, Inc., a regional ag cooperative based in Bloomington, Ill., which made $10 billion in sales last year.
The first co-ops began from a mutual need for fuel on the farm in the 1920s, when standard oil companies had no financial incentive to provide fuel to rural areas, Turner said. "But co-ops are not a non-profit. We need capital to replace equipment and to return patronage to our members," Turner said.
Member involvement was a hot topic at the co-op summit as leaders shared ideas of how to bring members to meetings and involve the "millennial" generation.
"We treat all members like they are board members so that they feel ownership over the co-op," Turner said.
Co-ops are generally smaller than their competitors, said Chris Wardrip, recipient of the 2014 Cooperative Hero Award for his leadership as CEO at Financial Health FCU and as board president of Pogue’s Run Grocer food co-op in Indianapolis.
Wardrip urged his fellow co-op leaders to look for ways to excel in specialized, targeted ways. Financial Health is a credit union focused on serving those with a low income.
The credit union often loans to those who have a credit score less than 640, Wardrip said, and participates in free tax preparation services.
McGeorge lauded what Wardrip does to help those who have few loan options.
"We either serve or suffer. Look for ways to serve our communities. At Organic Valley, we serve the organic market and preserve the family farm using the co-op model," McGeorge said.
Ellen Michel was named to the Indiana Co-operative Hall of Fame for promotion of Bloomingfoods, an organic grocer based in Bloomington, Ind. She was the co-ops first marketing and outreach manager. Since 2001, when she joined the staff, membership increased from 1,000 to 11,000 and expanded to five locations.
