Developing Cooperative Ventures in Kentucky
One of the greatest challenges in taking on a new farm enterprise is marketing. Many farmers are able to put the production management expertise in place for an agricultural product relatively quickly but often struggle entering existing market channels or developing new ones. Many good product ideas developed on the farm fail because either a limited understanding of how markets work or because the production value is too small to attract larger buyers that can sustain the viability of an enterprise.
New cooperative efforts are developing all around the State seeking to build opportunities for farmers selling products like catfish, fresh vegetables, pumpkins, fruit, cider, sorghum syrup, herbs, fiber, and other commodities. Many of these efforts involve some degree of adding value to the members' products through packing, grading, cooling, processing, and/or packaging.
While a cooperative is not the only way for farmers to work together to create opportunities for themselves, they seem to be gaining renewed interest around the State. The success of these new cooperative ventures will depend heavily on careful study of the activities pursued prior to making major investments into facilities. A thoughtful, forward-looking business plan is a key success factor for which there is little substitute.
The cooperative venture needs strong leadership and committment from its members. This can be especially critical in the early stages of the formation of a cooperative. Members of a successful cooperative venture typically have to make considerable sacrifices of time and financial resources as they are working to create new marketing opportunities for themselves.
Member education of the marketplace is another key success factor required both in the startup phase and on an ongoing basis. Cooperative board members need to be committed to keeping the cooperative in touch with the changing customer and with new technologies that can potentially impact the cooperative's way of doing business.
Strong management must be in place to oversee the day-to-day operations of any cooperative effort. Investment in good people is every bit as critical an investment as equipment and farmers considering a move into a cooperative should be prepared to pay for the right personnel to make the cooperative a success.
The process of making cooperation work, however, should be carefully thought through. Demand for new products and services that our farmers can provide is expanding all over the world. New market development partnerships with other farmers that secures access to special equipment and personnel will be one way for our farmers across the Commonwealth to play a role in the design of our future food and fiber system.
For More Information
For additional information, please contact, Tim Woods.