C IL | We all want to do business with Coop A because you and me, the client-members, are making more money. But you get to pay for the infrastructure for Coop A by charging like Coop B at least for a while and don't forget every Coop A client-member wants to you treat their 12 acres in 3 different fields as good as the client-member who is farming 1000 or 10,000 acres because the cooperative is there to serve everyone equally no matter how large or small.
It's a tough balance. We have two large cooperatives based locally and as far as I can tell both are doing a fair amount of business. One seems to be a better business partner for what I need but we don't all need the same things and competition should create long-term market efficiencies. Lots of new infrastructure built by both in the last 10 years and that looks very smart right now. Look at the screaming on here when there is a merger and the local cooperative location closes.
As farm age increases I imagine cooperatives will continue to do well, as they provide many services desirable to farm operators who want to do less personal operating at increasing margins. All while large farms continue to in-source many of those previous services which they find they can perform more economically efficiently. |