Ep 1419 Cooperating to Compete

Along the Food Chain with Michael Olson and...

Sabrina Servais, Farmer, Hamburg Hills Farm, Stoddard, WI, Member, Organic Vallely Farm Coopertive & Elizabeth McMullen, PR Program Manager, Organic Valley Farm Cooperative

When farming alone for a distant market, farmers tend to be price takers. But when cooperating with other farmers, they may gain enough clout to become price makers. And so we ask:

How do farmers cooperate to become price makers instead of price takers?

My first MetroFarm speaking engagement was a three-day seminar for family-sized dairy farmers in Drummondville, Quebec.

The farmers were facing a fundamental change in their dairy industry, which was then being funded via government subsidies, but that would soon be forced to compete in the open market of the North American Free Trade Agreement against the industrial giants in the U.S.

The organizer of the event, which took place in the snow-white of winter, wanted me to help the farmers find a way to survive the change.

After listening to their fears of having to compete, without support from government subsidies, I suggested they consider establishing a marketing cooperative to differentiate their Quebec milk from the commodity milk of the industrial giants. I said, “What you have is not a commodity, it is something that is truly special, but you have to sell the world on how special it is. If you don’t, all milk is white, and whoever can produce the most white milk for the least coast will likely win the consumer dollars. That is free trade.”

Shortly thereafter, I met some folks at a farm conference in California who were doing what I advised the Quebec farmers, which was to cooperate with other farmers to gain some clout. They called themselves the Organic Valley Farm Cooperative, and they had something truly special to sell.

Recently I ran across the Organic Valley folks at Natural Products West, and learned their coop now has over 1,800 family dairy farm members, with sales over a billion dollars per year. Today its time to ask….

How do farmers cooperate to become price makers instead of price takers?