From Eggs to Electricity: Types of Cooperatives in Wisconsin
From Eggs to Electricity: Types of Cooperatives in Wisconsin
I - Introduction to Wisconsin Cooperatives
II - A Brief History III - Types of Co-ops (by Industry) in
Wisconsin Today
I - Introduction to Wisconsin Cooperatives
II - A Brief History III - Types of Co-ops (by Industry) in
Wisconsin Today
I - Introduction to Wisconsin Cooperatives
I - Introduction to Wisconsin Cooperatives
What is a cooperative business? Historically, communities have worked
together to meet their needs for resources, products, and services.
While a variety of types businesses today work towards meeting our needs, co-ops follow unique principles
What is a cooperative business? Historically, communities have worked
together to meet their needs for resources, products, and services.
While a variety of types businesses today work towards meeting our needs, co-ops follow unique principles
Rochdale Principles of Cooperation
Rochdale Principles of Cooperation
Voluntary and Open Membership Democratic Member Control Member Economic Participation Autonomy and Independence Education, Training, and Information Cooperation Among Cooperatives Concern for Community
Voluntary and Open Membership Democratic Member Control Member Economic Participation Autonomy and Independence Education, Training, and Information Cooperation Among Cooperatives Concern for Community
A Brief HistoryA Brief History
Ann Pickett of Lake Mills started the first WI co-op in 1841
She pooled milk from neighbors’ farms to make cheese.
Proceeds were returned to her neighbors in proportion to the amount of milk they provided
Ann Pickett of Lake Mills started the first WI co-op in 1841
She pooled milk from neighbors’ farms to make cheese.
Proceeds were returned to her neighbors in proportion to the amount of milk they provided
Initially, the government ignored or was hostile to cooperatives.
But in 1887 Wisconsin became one of the first states to legalize cooperative business.
It was soon updated with the Rochdale cooperative principles, and in 1922 was adapted to the federal Capper - Volstead Act -- the “Magna Carta” of cooperative marketing.
Initially, the government ignored or was hostile to cooperatives.
But in 1887 Wisconsin became one of the first states to legalize cooperative business.
It was soon updated with the Rochdale cooperative principles, and in 1922 was adapted to the federal Capper - Volstead Act -- the “Magna Carta” of cooperative marketing.
Cooperatives flourished under the federal support of the Roosevelt Administration in the 30s and 40s
They helped establish the electric and telecom infrastructure that connected rural and urban communities, and, today, continues to provide services.
While agricultural cooperatives lost territory to corporate farms in the 20th century, new market emphasis on organic food has helped fuel interest in cooperatives in dairy and other agricultural industries.
Cooperatives flourished under the federal support of the Roosevelt Administration in the 30s and 40s
They helped establish the electric and telecom infrastructure that connected rural and urban communities, and, today, continues to provide services.
While agricultural cooperatives lost territory to corporate farms in the 20th century, new market emphasis on organic food has helped fuel interest in cooperatives in dairy and other agricultural industries.
Cooperatives TodayCooperatives Today
According to the most recent study by the USDA Rural Development Service, Wisconsin cooperatives represent: 2.7 million cooperative
memberships More than $5.6 billion in
gross sales 30,000 local employees $200 million in state and
local taxes
According to the most recent study by the USDA Rural Development Service, Wisconsin cooperatives represent: 2.7 million cooperative
memberships More than $5.6 billion in
gross sales 30,000 local employees $200 million in state and
local taxes
Cooperatives TodayCooperatives Today
Wisconsin has the second most cooperatives in the nation, behind MN
There are over 1,000 co-ops registered in the state
Many parents of students may serve on the boards of local co-ops, or may be the employees of local co-ops
Wisconsin has the second most cooperatives in the nation, behind MN
There are over 1,000 co-ops registered in the state
Many parents of students may serve on the boards of local co-ops, or may be the employees of local co-ops
Local, state, regional, nationalLocal, state, regional, national
The cooperative structure can be used for co-ops that have business units at the local, state, regional or national level
Some larger regional co-ops have a federated structure which means that their membership includes both individual producers (i.e. farmers) and local co-ops
The cooperative structure can be used for co-ops that have business units at the local, state, regional or national level
Some larger regional co-ops have a federated structure which means that their membership includes both individual producers (i.e. farmers) and local co-ops
Case Study: CHS Inc.Case Study: CHS Inc. CHS Inc., the nation’s largest co-op, based in the Twin Cities, is a regional,
federated co-op with both farmer members as well as local co-ops that are members
CHS Inc. is a diversified energy, grains and foods company The company is owned by farmers, ranchers, other cooperatives, and thousands
of stockholders In 2008, CHS owners from 48 states shared a $343 million patronage
disbursement
CHS Inc., the nation’s largest co-op, based in the Twin Cities, is a regional, federated co-op with both farmer members as well as local co-ops that are members
CHS Inc. is a diversified energy, grains and foods company The company is owned by farmers, ranchers, other cooperatives, and thousands
of stockholders In 2008, CHS owners from 48 states shared a $343 million patronage
disbursement
ElectricElectric
Most rural areas and farms in Wisconsin, and across America, did not have electricity until President Roosevelt created the Rural Electrification Administration (REA) in 1935
Up to that point, people in the countryside generally lived without power.
Most rural areas and farms in Wisconsin, and across America, did not have electricity until President Roosevelt created the Rural Electrification Administration (REA) in 1935
Up to that point, people in the countryside generally lived without power.
ElectricElectric
The REA loaned money to community energy cooperatives, which flourished and spread across the state.
Today, electric cooperatives provide energy to rural and metropolitan citizens alike
The REA loaned money to community energy cooperatives, which flourished and spread across the state.
Today, electric cooperatives provide energy to rural and metropolitan citizens alike
ElectricElectric
2 types of electric co-ops (1) Generation and
transmission (G & T) co-ops that create and send power via the transmission grid to local distribution co-ops
(2) Local distribution co-ops that send the power to businesses and households
2 types of electric co-ops (1) Generation and
transmission (G & T) co-ops that create and send power via the transmission grid to local distribution co-ops
(2) Local distribution co-ops that send the power to businesses and households
Case Study: Adams-Columbia Electric Cooperative
Case Study: Adams-Columbia Electric Cooperative
Adams-Columbia Electric Cooperative is the largest rural electric distribution cooperative in the state.
ACEC serves 36,000 members/owners in 12 central-Wisconsin counties. It purchases & sells approx. 500,000,000 kWh a year.
ACEC employs 109 full-time, 13 season/part-time, and 78 meter readers.
Adams-Columbia Electric Cooperative is the largest rural electric distribution cooperative in the state.
ACEC serves 36,000 members/owners in 12 central-Wisconsin counties. It purchases & sells approx. 500,000,000 kWh a year.
ACEC employs 109 full-time, 13 season/part-time, and 78 meter readers.
Grain, Farm Supply, and Fuel
Grain, Farm Supply, and Fuel
Over 150 retail agricultural grain and farm supply cooperatives provide crop inputs, animal feed, grain marketing and petroleum products
Over 150 retail agricultural grain and farm supply cooperatives provide crop inputs, animal feed, grain marketing and petroleum products
DairyDairy
Dairy co-ops among the first American agricultural cooperatives.
More dairy farmers have relied on cooperatives to market their product than any other industry.
Co-ops provide a market outlet, help bargain for better prices, and represent farmers’ interests in public policy
Dairy co-ops among the first American agricultural cooperatives.
More dairy farmers have relied on cooperatives to market their product than any other industry.
Co-ops provide a market outlet, help bargain for better prices, and represent farmers’ interests in public policy
DairyDairy
Today, there are approximately 220 dairy cooperatives in Wisconsin
83% of milk sold by Wisconsin farmers is marketed through dairy cooperatives
Today, there are approximately 220 dairy cooperatives in Wisconsin
83% of milk sold by Wisconsin farmers is marketed through dairy cooperatives
Case Study: Organic ValleyCase Study: Organic Valley
Organic Valley works exclusively with family farms.
Their mission is to allow families to retain independence via the cooperative model. 600,000 family farms have been taken over by corporations since 1960.
Of its 1,652 farms across the US and Canada, Wisconsin has the most (523) of any state
Organic Valley works exclusively with family farms.
Their mission is to allow families to retain independence via the cooperative model. 600,000 family farms have been taken over by corporations since 1960.
Of its 1,652 farms across the US and Canada, Wisconsin has the most (523) of any state
Farm Credit & Credit UnionsFarm Credit & Credit Unions
Wisconsin’ federally chartered farm credit cooperatives serve farm families.
Credit Unions are a popular means of keeping credit within a community, paying out $289 million in dividends annually to members.
Together, cooperative credit employs 5,349 people and generates $157 million in total income.
Wisconsin’ federally chartered farm credit cooperatives serve farm families.
Credit Unions are a popular means of keeping credit within a community, paying out $289 million in dividends annually to members.
Together, cooperative credit employs 5,349 people and generates $157 million in total income.
Insurance: Town Mutual Insurance Companies
Insurance: Town Mutual Insurance Companies
Town Mutual Insurance Companies are a type of cooperative insurance company owned by the policy holders
These “mutuals” primarily offer property and casualty insurance
Some of the oldest cooperatives in America are mutual insurance companies. The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was organized by Benjamin Franklin and his colleagues in March 1752
Today, there are 105 Town Mutuals in WI, most of which were founded before 1900.
Town Mutual Insurance Companies are a type of cooperative insurance company owned by the policy holders
These “mutuals” primarily offer property and casualty insurance
Some of the oldest cooperatives in America are mutual insurance companies. The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was organized by Benjamin Franklin and his colleagues in March 1752
Today, there are 105 Town Mutuals in WI, most of which were founded before 1900.
Case Study: Sugar Creek Mutual Insurance Company
Case Study: Sugar Creek Mutual Insurance Company
136 year old cooperative in Southeast Wisconsin
Three full-time employees run the co-op, along with nine agents.
Covers 1,904 policies, with a total of $580,860,696 of risk-in-force.
136 year old cooperative in Southeast Wisconsin
Three full-time employees run the co-op, along with nine agents.
Covers 1,904 policies, with a total of $580,860,696 of risk-in-force.
Food cooperatives employ fewer people (659 jobs) than other industries
However, they still generate a total income close to $20 million
Historically, co-op grocers raised the profile of cooperative principles in metropolitan areas
Food cooperatives employ fewer people (659 jobs) than other industries
However, they still generate a total income close to $20 million
Historically, co-op grocers raised the profile of cooperative principles in metropolitan areas
FoodFood
Case Study: Willy Street Co-opCase Study: Willy Street Co-op
Willy Street Co-op is a full-service grocery cooperative specializing in locally made, natural, and organic foods.
Over 16,000 cooperative members produce $17 million of sales annually.
Willy Street Co-op is a full-service grocery cooperative specializing in locally made, natural, and organic foods.
Over 16,000 cooperative members produce $17 million of sales annually.
ConsumerConsumer
Includes grocery and worker-owned cooperatives
Includes grocery and worker-owned cooperatives
Telephone/TelecommunicationsTelephone/Telecommunications
Local telephone co-ops offer advanced telecommunications services to help rural Wisconsin compete in a world economy
Telecomm co-ops serve many communities in Wisconsin
Local telephone co-ops offer advanced telecommunications services to help rural Wisconsin compete in a world economy
Telecomm co-ops serve many communities in Wisconsin
New Generation Co-ops (NGC’s)
New Generation Co-ops (NGC’s)
Farmers started first NGCs when Minnesota and North Dakota sugar plants were closing (American Crystal Sugar Co, Minn-Dak Farmers Co-op, and others)
The new approach to cooperatives developed as a defensive strategy against unstable markets NGC’s created, replaced, or stabilized markets
when the markets failed, such as in plant closings
Farmers started first NGCs when Minnesota and North Dakota sugar plants were closing (American Crystal Sugar Co, Minn-Dak Farmers Co-op, and others)
The new approach to cooperatives developed as a defensive strategy against unstable markets NGC’s created, replaced, or stabilized markets
when the markets failed, such as in plant closings
Evolution of NGCs: “Offensive” market responses
Evolution of NGCs: “Offensive” market responses
The NGCs shifted into offensive strategies of capturing greater market value
Increasing value of local goods and services Ex: Ethanol co-ops raise value of area corn crop; raise
investor-member income from value-added processing
Both protecting and increasing value of member investments Ex: Protect and increase value of investment in senior
housing co-ops by making markets for resale, provide higher quality member services
The NGCs shifted into offensive strategies of capturing greater market value
Increasing value of local goods and services Ex: Ethanol co-ops raise value of area corn crop; raise
investor-member income from value-added processing
Both protecting and increasing value of member investments Ex: Protect and increase value of investment in senior
housing co-ops by making markets for resale, provide higher quality member services
The NGC Model Continues to EvolveThe NGC Model Continues to Evolve
Traditional Cooperatives are adapting NGC strategies, while NGC partner with other investors
Capital needs often require outside investors and “hybrid” business models Ex: Co-op members may partner with other investors in
Limited Liability Companies (LLCs) Newer business models define profit expectations,
which helps eliminate investor conflicts Ex.: Minnesota 308(b) Model; Low-Profit, Limited Liability
Company (L3C) Model. Both define expectations and returns for cooperators and outside Investors
Traditional Cooperatives are adapting NGC strategies, while NGC partner with other investors
Capital needs often require outside investors and “hybrid” business models Ex: Co-op members may partner with other investors in
Limited Liability Companies (LLCs) Newer business models define profit expectations,
which helps eliminate investor conflicts Ex.: Minnesota 308(b) Model; Low-Profit, Limited Liability
Company (L3C) Model. Both define expectations and returns for cooperators and outside Investors
For more informationFor more information
To find out more about cooperatives in Wisconsin, particularly those located in your community, please visit the Cooperative Network
This material is made possible by the CHS Foundation
To find out more about cooperatives in Wisconsin, particularly those located in your community, please visit the Cooperative Network
This material is made possible by the CHS Foundation