Exactly what do “Cooperative Councils” do?
In Nebraska, 32 farmer-owned cooperatives make-up the trade association known as the Nebraska Cooperative Council.
“The Council assists Nebraska agricultural cooperatives with issues related to agricultural inputs, grain issues, governance, education programming and regulatory and government relations on legislative issues in Lincoln and Washington, D.C.” said Rocky C. Weber, president and general counsel for the Nebraska Cooperative Council in Lincoln.
The Nebraska Cooperative Council was formed in 1945 to support Nebraska’s agricultural cooperatives. Ninety-six percent of Nebraska’s agricultural cooperatives are members.
In Iowa, the Iowa Institute For Cooperatives also represents grain and farm supply cooperatives, electric cooperatives, telecommunications and regional cooperatives, and credit union members.
In Kansas, the Kansas Cooperative Council works on behalf of all Kansas’ cooperative businesses.
“We represent farm credit members, electrical cooperative members and hope to have cooperative groceries again soon,” said Brandi Miller, president and CEO for the Kansas Cooperative Council.
A key function of membership support is legislative advocacy. Almost all Nebraska, Kansas and Iowa councils and many nationally known large farmer-owned cooperatives are also members of the National Council of Farmer Cooperatives (NCFC) in Washington, D.C., which is a national trade association assisting cooperatives.
KCC helps farmers with predominately state issues.
“When we’re working on a federal issue, we engage NCFC,” Miller said.
The fast-changing world of agricultural cooperatives, however, doesn’t mean less of a cooperative presence.
“While 20 years ago there were approximately 200 farmer-owned cooperatives in Nebraska, there are 35 today,” Weber explained. “However, Nebraska’s farmer-owned cooperatives maintain locations in approximately 376 communities across the state of Nebraska with a combined annual state economic impact of $2.2 billion.”
Even with changing farm demographics with fewer but larger farms, Weber noted better capitalized cooperatives are necessary to deliver the goods and services that 21st Century farmers require. Fast and efficient transportation of agricultural inputs and grain receiving capabilities provides the biggest return for farmer members.
“In Kansas, we’ve seen success of cooperative-owned companies pooling resources to build train loading facilities, servicing a wider reach than an individual cooperative potentially could,” Miller said.
In Nebraska, 110-car shuttle trains to transport grain requires substantial investment by grain sellers to build shuttle train loading facilities, loop tracks, associated grain and farm input storage and handling facilities.
When Nebraska’s historic March 2019 flood took out some rail lines, they were quickly repaired.
“We had four separate cooperatives at six locations with some degree of flooding,” Weber said.
With fewer members than 20 years ago, mergers are a result of consolidation.
“Consolidation … is what it is. It’s a reality of agriculture. The entire agricultural supply chain is consolidating and cooperatives are part of that supply chain,” explained Dave Holm, executive director of Iowa Institute For Cooperatives. “Manufacturers and growers are consolidating ... and cooperatives are responding. The U.S. Department of Agriculture defines anyone with $1,000 of gross income as a farmer, so when you set the bar that low, more people are categorized as farmers, when they may actually be weekend or hobby farmers.”
In 2017, Nebraska’s farmer-owned cooperative still employed nearly 6,000 people directly with a combined payroll of over $300 million, mostly in rural communities.
“Nebraska’s farmer owned cooperatives in 2017 paid to their farmer-owners cash patronage payments, member’s equity cash redemption and estate member’s equity cash redemption payments of $78 million, while reinvesting approximately $186 million in property, plant and equipment to serve their farmer patrons,” Weber said. Farmer-owned cooperatives also provide funding to youth scholarships, volunteer fire departments, local youth and school activities.
Iowa grain cooperatives have 702 locations in Iowa, employ more than 8,000 people with average pay of $69,000 with payroll and benefits. Their total payroll was $553 million. They also paid over $32 million in property taxes.
A Kansas State University study revealed that for every job at a Kansas cooperative, it generates another job outside the cooperative system, Miller relayed.
Water continues to be a key issue for Kansas cooperatives.
“Currently, three separate issues impact my members, and we’re working to understand how decisions by Division of Water Resources impact Kansas cooperatives,” Miller said.
Four programs are geared to Iowa’s trade association’s cooperative members: “Legislative and regulatory representing members in Des Moines and Washington D.C., provide education workshops for better decision-making, business consult for members about merger studies with a benchmarking program (to compare performance with peer groups,) and networking opportunity to get together and build their network,” Holm said. “They’re all members, and they all attend many sessions.”
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