Patricia Miller 2016-09-05 00:18:19
Co-ops and communities work together to keep rural America vibrant.
Which came first, the co-op or the community? Cooperatives are created by communities of like-minded people to fill an unmet need. And co-ops themselves become communities, binding their members together for a common purpose.
In rural America, co-ops often are the hubs of their communities, providing products, services and patronage to members. They also provide jobs and salaries that attract and keep employees and offer support — both financial and in the form of volunteers — to myriad causes, programs and leadership roles that benefit members, employees and local residents.
“One way to look at a co-op like CHS is to think of it as a pebble being tossed into the ‘pond’ of a community,” says John Engelen, vice president, CHS Government Affairs. “That co-op pebble sends out ever-widening ripples that affect members, employees, residents, local businesses, and a host of vendors and suppliers, creating advantages that might never have happened without the CHS pebble and the cooperative model for doing business.”
Teaming Up
Co-op Country Farmers Elevator (CCFE), based in Renville, has been creating ripples in western Minnesota since 1886. “We’re the oldest grain elevator co-op in the state,” says CEO Craig Hebrink. “We’re located in small towns, where we’re often the largest employer. The majority of our employees live in and around the towns where we have facilities, so we believe part of doing business is giving back to our members and our towns.”
CCFE gives back in many ways, from employees serving on school boards, city councils and in other leadership roles to sponsoring youth sports, supporting school programs and offering scholarships for high school seniors. The CCFE impact can be seen in other ways, too, including teaming up with other cooperative partners to make a $50,000 donation for a new state-of-the-art hospital and upgrading facilities at its Danube location, which brought new business and jobs to the community. And as the largest local property tax contributor, the cooperative has a significant impact on several cities’ budgets.
To quantify this kind of cooperative ripple effect, CHS commissioned the business consulting firm Ernst & Young (EY) to take an in-depth look at the economic impact of CHS on rural America. The findings revealed how cooperatives and their communities are better together and why these partnerships have thrived for more than a century.
The Big Picture
The assignment for EY was to look at the big picture: CHS overall impact as a company, including all its business units, using 2014 as the benchmark year. The analysts then broke down the numbers, using the categories of employment, income and output, by state and congressional district.
The EY analysts began with the impact of patronage, salaries and an array of expenditures reflecting everything co-ops bought and sold in their communities. These were the “direct” effects — the ripples closest to the co-op.
In Rochelle, Ill., for example, CHS bought the local ethanol plant. Producer Mark Hill is benefiting from that acquisition. “My operation’s efficiency and production increased dramatically with access to the ethanol plant,” Hill says. “Now I can haul 16,000 bushels of corn a day to the plant, compared to 4,000 bushels in the past.”
The analysts also explored the indirect effects, the next ring of ripples: What do members do with the patronage they receive from their co-ops? Do they save some? Buy new equipment? Remodel their facilities? Expand their acreages or livestock herds? Redo their kitchens?
“In 2014 alone, CHS paid out more than $500 million in cash to its owners,” Engelen says. “That transaction happens only in a cooperative. The cash CHS distributes puts money into communities when members spend or save — even saving it increases the lending dollars available to others.”
Then EY studied the broadening ripples — the economic impact on suppliers and their suppliers, which they termed the “induced” effect.
Northern Partners Cooperative (NPC), based in Mendota, Ill., exemplifies this expanding ring of ripples. In a joint venture with CHS, NPC recently built a one- stop grain and crop nutrients facility on the Illinois River that includes 250,000 bushels of storage; grain barge loading and unloading; and dry fertilizer and liquid nitrogen storage, blending and sales. The investment now benefits members directly by giving them access to world markets via the river, but also employed a bevy of suppliers during construction.
Finally, EY took the total effect and calculated the “multipliers” to illustrate the overall impact of those ripples to the economy.
As an example, consider CHS employment across the U.S. In 2014, CHS directly employed approximately 12,100 workers in its ag, energy and corporate/ business solutions operations. Indirect and induced economic activity related to CHS operations supported additional workers.
“We were surprised to find that the economic impact extended to all 50 states,” Engelen says. “CHS contributes to a positive economy throughout the country, particularly in rural areas. These contributions are directly related to being a cooperative. The way we do business is good for communities beyond patronage checks, equity redemptions and salaries. It’s a significant factor in the strength of our rural economy.”
Beyond Dollars and Cents
The overall impact CHS has on the U.S. economy each year — more than $30 billion — is amazing and a bit mind- boggling, but it doesn’t just represent dollars and cents. It also reflects the countless local, grassroots contributions co-ops make to their communities. It can be seen in the uniforms sponsored by CCFE for Renville’s summer youth baseball program.
In Idaho, it represents the community outreach embraced by CHS Primeland, based in Lewiston. “As a cooperative and a business, we’re all about rural America and supporting our producer-owners,” says Ken Blakeman, general manager. “We need to have strong, vibrant communities that attract the kind of employees who will help make us successful and that provide appealing places for everyone to work and live.”
Blakeman says his co-op is always looking for ways it can improve its communities. “Each town where we have a location is a little different, so I give the staff free rein to find ideas and get people to participate.”
In one town, a crew of employees picked up hammers and saws to fix up the buildings where its community fair is held. In another, the co-op donated property so the community could build a new fire station. In yet another, employees worked with building owners to give Main Street a facelift, power- washing facades and brushing on fresh paint. Outside Lewiston, employees adopted a one-mile stretch of highway, picking up litter several times a year, then celebrating with a barbecue.
CHS Primeland also champions Harvest for Hunger, the annual food drive sponsored by CHS Country Operations. Across the co-op’s territory, locations hold fun runs and kiss-the-pig contests, sell T-shirts, and conduct other activities to help collect food and financial donations for local food shelves. Last year, they donated more than $25,000 and nearly 1,000 pounds of food.
Blakeman believes these activities not only make the communities the co-op serves better places to live, but also make CHS Primeland a more attractive place to work while building camaraderie and pride in communities among employees and members.
“It doesn’t take a tremendous amount of time or money to make a difference,” Blakeman says. “But if it can help a little bit, it’s a big deal for our communities.” Cooperatives strengthen their communities locally, while CHS takes that ripple and widens it nationally.
“Being involved in our communities and rural America is CHS; it’s who we are,” says Linda Tank, president, CHS Foundation, and senior vice president, CHS Communications and Public Affairs. “It’s part of our history and connects to our value to be good stewards in the communities where our employees and members live and work.”
CHS has three areas of focus designed to help shape the future of agriculture on behalf of its owners:
• Developing future ag leaders • Building strong, vibrant rural communities • Improving farm safety For example, the CHS
Foundation partners with the Progressive Agriculture Foundation (PAF) to teach kids and families to be safe in their homes and on farms around livestock and equipment. Each year PAF, with support from organizations like the CHS Foundation, sponsors more than 400 safety days across North America, reaching more than 100,000 children and adults.
These strides to improve farm safety resonate with Brian Kuhl, CHS strategic sourcing director, who also works on his family’s fourth-generation farm in northwestern Wisconsin. Nine years ago, his father fell 12 feet, injuring his spinal cord. With treatment and help from organizations such as AgrAbility, he’s back doing what he loves: farming.
“Our farming operations have become so complex and the technology has emerged so rapidly that it’s crucial for farm families to know what’s safe and what isn’t, so they can keep themselves and others safe,” says Kuhl, who also serves as board chair of PAF. “For example, it’s only recently that we’ve become concerned about texting — or falling asleep — while driving auto-steer tractors.”
Cooperatives and communities. A co-op pebble drops in a community and the ripples spread out and away, touching members, employers and suppliers locally and far beyond. The economic impact is astounding, and something every co-op member can be proud of. This impact demonstrates that the business they own and govern, whether it’s their local co-op or CHS, is financially successful, serving producer- owners and strengthening the fabric of rural America.
Cooperatives: ‘A Central Part of Our Community’
Producers Scott and Julie Johnson live near Manvel, N.D., and farm 2,200 acres of sugar beets, wheat, barley and soybeans. As third-generation farmers and members of their cooperative, CHS Ag Services, the Johnsons believe cooperatives build strong producers and strong communities through personal relationships and trusted advice. They wrote the following essay.
In today’s world, technology allows us to do business with a click of a button. No human interaction is needed. But farmers value our local cooperative because of face-to-face relationships.
It’s that focus on building strong producers in rural communities that keeps us doing business with cooperatives. We have built long-standing relationships that go back generations. Scott’s dad and grandpa have been board members at our Manvel, N.D., elevator. Bill, Scott’s dad, still serves on our local CHS Ag Services board.
Our co-op has always been a central part of the community. If it were gone, we’d miss the heart of Manvel. The local elevator is the only gathering place in town where farmers and community members can meet to share donuts and coffee while solving the world’s problems.
Those who work at the co-op have become trusted friends and advisors. Before we went on vacation, our agronomist reminded us to lock in fertilizer prices to manage our risk. A member of the agronomy staff walks our fields almost weekly to give us recommendations that benefit our land and our bottom line.
That’s not something every business will do, but it’s what cooperatives do. We value the personal relationships we’ve built through cooperatives and have had the opportunity to network with other producers from across the United States through the CHS New Leader Forum.
We have built friendships with our local CHS Ag Services staff, board members and their spouses.
Cooperatives have taught us to look outside our operation. Through our co- op, we’re building for our future, as well as that of the community. And as we head toward that future, we know the cooperatives we do business with will be right next to us, supporting us each step of the journey.
CHS grain purchases supported nearly 210,100 JOBS in 2014
CHS global business generated $33.45 BILLION IN GROSS SALES in the U.S. in 2014 with 55 PERCENT, OR $18.5 BILLION, IN DIRECT GROSS ECONOMIC OUTPUT
CHS corporate citizenship and the CHS Foundation invested more than $8.5 MILLION in the U.S. in 2014 to develop future leaders, improve safety and build vibrant communities
CHS purchased nearly $14.8 BILLION of grain through CHS Grain Marketing, CHS Processing and Food Ingredients, and CHS Country Operations in 2014
EVERY $1 MILLION of CHS direct gross output supported an additional $600,000 in output for other U.S. businesses
CHS direct, indirect and induced economic activity SUPPORTED 60,770 JOBS
CHS distributed $518 MILLION in cash to owners in 48 states in 2014
CHS INVESTED $411 MILLION in construction, machinery, equipment, tanks, vessels, grain storage, IT and land in 2014
Published by CHS Inc. View All Articles.
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