Cooperative Speed and Space Cooperatives will continue to play an increasingly important role in rural American life as they meet greater demands from their customers. In recent decades, farm operations and equipment have grown considerably in their capacity to apply farm inputs and harvest. Co-ops have had to adjust as well, adding “speed and space,” says Slowinski of North Central Grain Cooperative. “Twenty years ago, farms ran one combine and two tandem trucks. Now they run two combines with 40-foot grain headers and they have three semis. The crop comes out much faster than it did 10 to 20 years ago.” Over the past seven years, WFS Cooperative in Truman, Minn., has invested nearly $100 million in upgraded facilities. “Cooperatives have increased their capacities,” says Ludwig. “And even if they made similar upgrades at half the level of WFS, investments totaled across the country would equate to a large investment on farmers’ behalf. The old infrastructure just couldn’t handle it.” When commodity prices are good, farmers inherently want to do business locally, says Slowinski. “When prices are in a down cycle and somebody has a better grain price, it tends to make them look around.” If you take price out of the equation, he says, advantage and opportunity for a cooperative is found in relationships with farmers and in customer service, not only for marketing grain, but also on the crop input side of the equation. “Generally, farmers don’t learn about the value of the co-op until later in life,” says the University of Minnesota’s Boland. “So they see other competitors come and go. They see emotional behavior, if you will, when it comes to pricing by multinationals. “It comes back to a question: Do farmers view the cooperative as an extension of their farming operation? Is it truly a vertical integration? Or is the co-op just another option that’s supposed to earn money and the farmer gets whatever is left over?” asks Boland. “At some point in their farming career, they realize the co-op has been a steady business and they come to appreciate it more over time.” Todd Ludwig, CEO, WFS Cooperative, Truman, Minn. Engelen. A good example can be seen in recent issues surrounding the waters of the United States. “We have a federal agency trying to implement how it sees the Clean Water Act working without a good understanding of real-life impact in rural areas,” he says. “We can’t expect them to know; it’s our responsibility to communicate that. We have to fi ll that gap.” In addition to water regulations, Washington will continue to seek to take legislative and regulative action on issues such as land use and environmental policy. Other possible regulations surrounding workplace safety, OSHA rules and similar labor force regulations may aff ect how farmers operate, says Engelen. Financial service regulations, especially those created after the fi nancial crisis, will continue to be felt in rural areas. Actions taken by the Commodity Futures Trading Commission meant to protect consumers could have detrimental eff ects as producers attempt to market their grain. 81% of Americans live in an urban or suburban environment “We know Congress eventually will take on tax reform,” says Engelen. “If they don’t know what a co-op is, they don’t know what CHS is. And if they don’t know CHS, they may not automatically appreciate how farmers and co-ops are taxed. So we have a responsibility to communicate our viewpoints on tax policy.” Food marketing has entered the political arena as well, as legislators debate issues around food ingredients, GMOs and food labeling, which has already been contested in states including California, Oregon and Vermont, says Engelen. The science of food has become a trade issue as biotechnology developments have allowed some countries to erect trade barriers. “As we respond to that as a company, we can help inform trade negotiations and work to ensure market access for our owners. “We face the challenge of making sure that elected offi cials understand the impact of policies on rural areas,” he adds. “CHS has to be a leader in Washington and in state capitals, and be an educator around issues. That’s important. If we don’t do it on behalf of our owners, who will?” Bigger, Better Data Technology has given farmers greater access to information than ever before. As data collection becomes more ubiquitous in rural America, experts believe future innovations will come with enhanced real-time analysis tools. “How we manage data is as important now as providing data,” says Slowinski. “Everybody has access to data; it’s how we interpret it that will make it benefi cial to the grower. The big pieces are who manages the data, who interprets the data and who owns the data. These are the trends, and lots of companies are taking big swings at opportunities to control that fl ow of information.” Q Your CHS Connection 11