Cooperatives: A Tried and True Part of Agriculture

While cooperatives have had a long history throughout the world, most people within the midwest would not be able to talk about agriculture or the rural communities without the mention of the local cooperative. While the industry has certainly changed the landscape of cooperatives, there is still a constant need for this type of business and a desire to see it continue. When the word cooperative is said, there are many different kinds that come to mind – not just the agricultural side. There are different types from food, electrical, telephone communications, financial, and so much more.

Cooperatives were established to bring the needed products to producers and give them the buying power that they couldn’t alone afford. By forming into a cooperative, which was usually just one town or a few locations, these farmers were able to access the products or services that they desired without breaking the bank.

About 100 years ago, cooperatives were formed when the economic need arose in rural areas. Cooperatives are an interesting business structure in the fact that they’re formed with the customer as a driving force, not profit like private firms. That is partly why they are one of the few businesses in some rural towns. They were formed to bring jobs to the area, allow the farmers to pool their risk and give them grain marketing opportunities that would otherwise not be available to them.

In the last 100 years, the single location cooperatives have essentially gone away in the state of Iowa with very few remaining and numerous mergers allowing for cooperatives to stay open. This is important to the history of cooperatives in Iowa, and allows for different diversifications and additional services to be offered like feed mills, large grain storage facilities, lumber divisions, and other revenue streams.

Through mergers, acquisitions, and growth, the local cooperatives have certainly changed over the years, but one thing remains the same – the desire of producers to have access to the products and services they need to continue to do what they love.

Cooperatives: A Tried and True Part of Agriculture