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Co-op formed to purchase local organic feed mill

Published on 1 September, 2012, Last updated at 16:08 GMT
Co-op formed to purchase local organic feed mill

Organic Valley (La Farge, Wisconsin) is one of the largest organic cooperatives in the US. The Indiana Cooperative Development Center was contacted by Organic Valley and asked to assist a group of 80 organic milk producers in northern Indiana form a cooperative to purchase a local organic feed mill.

Most of these producers have small, organic farms with less than 50 dairy cows. The majority of the milk producers belong to the local Amish community. As a community they do not like public exposure. Their leaders are mostly the elders with a couple of younger producers in their 30s. They do business on a handshake agreement and that has been problematic. Social responsibility is more than a buzz word – it’s a way of life for them. They are developing the cooperative for “the community”; not only their community but for their neighbors as well because they know that the organic model is the only way they can keep their small farms profitable and sustainable.

An initial two-day meeting of all interested parties was held in late March, 2011. A five-member executive committee was formed and dollars were committed for initial expenses for the formation of a cooperative. These milk producers were concerned about their ability to obtain high quality organic livestock feed and supplies. Their vision was to secure, for future generations, the availability and price stability of high quality organic livestock feed and supplies for the community.

Producers in the community are dependent on their ability to obtain high-quality organic feed for their farming operations. Because of their dependence, community members were concerned about the future and continued existence of the Wolcottville Organic Feed Mill. Expansion of the organic livestock industry and the profitability of these operations are interconnected to the future existence and expansion of the mill.

Following the initial meeting in March, ICDC staff worked with the organizing committee to explore the possibility of purchasing the Wolcottville Organic Feed Mill. Staff helped the steering committee review and understand the financials of the existing mill operations and identified a business to provide a valuation of the feed mill. An attorney experienced in co-op law was identified and ICDC staff assisted in the development of the co-op’s articles of incorporation and by-laws.

Beginning in 2012, the steering committee began meeting every two weeks to complete their organizational documents. By April 2012, the cooperative was registered with the Indiana Secretary of State and a board was elected. A number of producers from Michigan are interested in becoming members of the cooperative, so incorporation in the state of Michigan is being considered.

Membership documents were developed next and the equity drive began in mid-summer. In just a few short weeks, they have reached over 50 percent of their goal of raising $250,000. The directors have established a goal of having a 50 percent equity stake prior to the actual purchase of the mill. In an effort to ensure they understand their fiduciary responsibilities as board members, the ICDC provided board training in July, 2012.

The purchase of the mill by the cooperative is expected to take place January 1, 2013.


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