Southern Ag Today

Author: Steven Richards

  • Before Starting a Farm Transfer: A Farm Family Pre-Agreement

    Before Starting a Farm Transfer: A Farm Family Pre-Agreement

    Often, when speaking to groups of young farmers looking to return to the family farm, the first question I am asked is, “What is the best way to start a farm transfer?”  In most circumstances, I typically recommend a trial period for both generations. Instead of jumping into a farm business partnership, the junior generation (future owners) and the senior generation (current owners) must agree on how they will work together and how rapidly the farm transfer process will progress. This is something I refer to as a “pre-agreement.”

    A pre-agreement should contain at least three parts: how to work together, how to develop the junior generation’s skills, and how long a trial period is necessary. Keep this agreement simple; it is not a legal agreement but a precursor to one. Treat this like an internship opportunity, where both sides must work together to improve the skills and employability of the junior generation and benefit the business for both generations.

    How to Work Together

    Get both generations’ expectations out on the table. It is better to air one’s concerns ahead of time than have difficult situations result. These “working together” guidelines should include basic things such as pay, time off, and when people are expected to show up and leave work. It is also wise to discuss how much autonomy or decision-making authority each person will have: will decisions be shared, or will the owner be the sole decision-maker?  Also, both parties need to be realistic about working together, even discussing how to part ways amicably if things don’t work out during this pre-agreement process. 

    How to Develop the Next Generation

    The next generation rarely has all the necessary skills and management ability to run the farm immediately. It is also just as rare that the senior generation will have all the necessary skills to be excellent trainers and teachers. The solution is to craft a development program that assesses the skills the junior generation needs and places the training responsibility on the senior generation. If training the next generation is too tricky, don’t be afraid to look to outside sources for farm manager training, such as college degrees, cooperative extension programs, trade schools and associates degrees, and Farm Bureau young farmer and rancher meetings.

    How Long of a Trial Period

    The junior and senior generations must agree on how long this pre-agreement trial period will last. At the end of the trial period, plan to make a decision: continue farming together; modify the working relationship and progress the farm transfer process; or part ways in a friendly manner. Both parties must always be open to voicing and hearing concerns.  For longer agreement periods, it’s a good idea to schedule routine checkpoints (at least annual, if not more frequent) to discuss how each generation is living up to their side of the bargain.

    A Sample Pre-Agreement

    A sample is provided here as an example of the types of things a pre-agreement could address.  Feel free to modify this sample to fit your farm’s circumstances.  If additional materials are needed, please talk to your local extension agent.  You may also find general business transfer guides at https://coopcenterSC.org. 

    Richards, Steven. “Before Starting a Farm Transfer: A Farm Family Pre-Agreement.” Southern Ag Today 5(15.1). April 7, 2025. Permalink

  • Making Cooperatives More Relevant and Exciting

    Making Cooperatives More Relevant and Exciting

    I truly enjoyed Phil Kenkel’s Southern Ag Today’s Article “Why Don’t We Start More Cooperatives?” The points and questions he raised got me thinking about cooperative formation opportunities and challenges faced by today’s business owners and society in general. 

    Recently, Phil’s article again came to mind when someone interviewed me about what it meant to run a cooperative development center: what were the challenges and opportunities? My answer to this question was that we must make cooperatives more relevant and exciting. 

    Relevance

    Certainly, the successful cooperatives we have in the United States are prime examples of relevance: credit unions, mutual insurance companies, cotton gins, peanut shellers, dairy processors, and many more.  By relevance, I mean a general awareness of cooperative organization being an option for incorporation.  

    I also believe we may be on the cusp of a cooperative resurgence.  Over 200 years ago, the cooperative movement was largely credited as society’s reaction to the Industrial Revolution, when the workforce had to adjust to mechanized production processes. At the same time, the manufacturing and transportation industries were consolidating into very large firms.  

    Today, we are amid the Digital Revolution, where society is grappling with information technology and artificial intelligence during a period of consolidation and rapid growth of technology firms, which has immensely changed commerce.  Cooperatives may yet again provide society with a response to these trends.   

    Excitement

    How does one get excited about a business structure? Well, a cooperative does have the word “cooperate” embedded in it, so that helps.  Also, in its most basic form, cooperative membership equates to one member, one vote, meaning equal voting representation for all its members.  So, a cooperative structure also embodies the principles of democracy.

    However, my take is that corporate by-laws (although important) are not an exciting rallying point.  Rather, what is the purpose of groups coming together? To address common social, economic, or cultural needs, as defined by the National Cooperative Business Association? How about gaining additional power and independence in an economic system where smaller actors are having an increasingly difficult time? All the above reasons seem compelling to me!

    The local foods movement has provided plenty of excitement and challenges to this space. A “food hub” is a relatively new business model that encompasses the aggregation, distribution, and marketing of local/regionally produced food products (Bartham, 2010).  This definition is remarkably similar to that of a farmers’ cooperative, aside from the fact that some food hubs are non-profit corporations (or other entities) not owned and controlled by farmers. 

    At the South Carolina Center for Cooperative and Enterprise Development, we have had good results generating excitement about cooperatives focusing on these current trends. Within the past 4 years, we have started eight new cooperatives, each addressing issues important to their members.  Some examples:

    Once started, of course, the work does not end.  Keeping cooperatives running smoothly and efficiently is also necessary.  Thankfully, there are many sources of support.

    Assistance for Cooperative Development

    Like the SC Center for Cooperative Development at Clemson University, many land-grant universities have cooperative centers that help train new board members and develop current board members. There is also CooperationWorks!, a non-profit that supports both land-grant and non-land-grant cooperative development centers. A map of development centers can be found on their website, along with many good supporting materials. 

    The USDA Rural Development encourages cooperative development and helps fund cooperative development through its Rural Cooperative Development Grants, gives priority points to cooperatives on its Value-Added Producer Grants, and provides direct assistance to minority-owned cooperatives through its Socially Disadvantaged Groups Grant.  

    Returning to Phil Kenkel’s article with his last line quoted, “Perhaps we just need to recycle some good old ideas!” seems appropriate to repeat. Maybe I would modify it just slightly to “recycle and repackage.” 

    Resources and References

    Bartham, J. (2010). Getting to Scale with Regional Food Hubs.  USDA Rural Development website accessed 7.17.2024. https://www.usda.gov/media/blog/2010/12/14/getting-scale-regional-food-hubs

    CooperationWorks! The National Cooperative Development Network.  Cooperative Development Locations.  Website accessed 7.17.2024. https://cooperationworks.coop/member-locator/#search

    Kenkel, P. (2024). Why Don’t We Start More Cooperatives? Southern Ag Today.  https://southernagtoday.org/2024/05/17/why-dont-we-start-more-cooperatives/

    National Cooperative Business Association. (2024). What is a Coop?  NCBA website accessed 7.17.2024 https://ncbaclusa.coop/resources/what-is-a-co-op/

    South Carolina Center for Cooperative and Enterprise Development (2024). Website accessed 7.17.2024. https://coopcentersc.org/

    South Carolina Department of Agriculture (2022). New Beef Co-op Seeks to Expand Processing, Create SC Beef Product.  SC Department of Agriculture News Release. https://agriculture.sc.gov/new-beef-co-op-aims-to-expand-processing-create-sc-beef-product/

    South Carolina Department of Agriculture (2024). New Cut Flower Co-op Working to Market South Carolina Blooms. SC Department of Agriculture News Release. https://cooperationworks.coop/success_stories/new-cut-flower-co-op-working-to-market-wholesale-south-carolina-blooms/

    United States Department of Agriculture, National Institute of Food and Agriculture. Land Grant Colleges and Universities (2019).  Website accessed 7.17.2024. https://www.nifa.usda.gov/sites/default/files/resource/LGU-Map-03-18-19.pdf  

    United States Department of Agriculture, Rural Development (2022). Preserving Seafood Heritage by Bringing in Next Generation.  Rural Development Success Stories. Website accessed 7.17.2024. https://www.rd.usda.gov/newsroom/success-stories/preserving-seafood-heritage-bringing-next-generation

    United States Department of Agriculture, Rural Development (2022). Gullah Coop: Growing Food, Preserving Culture.  Rural Development Success Stories. Website accessed 7.17.2024. https://www.rd.usda.gov/newsroom/success-stories/gullah-co-op-growing-food-preserving-culture

    United States Department of Agriculture, Rural Development (2024). Website accessed 7.17.2024. Webpage resources:

    Service Center Locator https://www.rd.usda.gov/browse-state

    Rural Cooperative Development Grant https://www.rd.usda.gov/programs-services/business-programs/rural-cooperative-development-grant-program
    Value Added Producer Grant     https://www.rd.usda.gov/programs-services/business-programs/value-added-producer-grants
    Socially Disadvantaged Groups Grant https://www.rd.usda.gov/programs-services/business-programs/socially-disadvantaged-groups-grant

    Richards, Steven. “Making Cooperatives More Relevant and Exciting.” Southern Ag Today 4(33.5). August 16, 2024. Permalink

  • Interested in Forming a Cooperative? Take the Cooperative Challenge!

    Interested in Forming a Cooperative? Take the Cooperative Challenge!

    There are many good reasons for starting a Cooperative, such as collaborative marketing, processing, distribution, or administration.  And there are many different goals for cooperatives to pursue, such as enhancing local food systems, increasing resources and funding, and even sharing philanthropic or community development goals. With all the potential cooperative purposes and goals, how does a group of individuals start the conversation about how they would like to form their cooperative?  

    One way is to start with a set of proposed by-laws formed by a similar cooperative and have this new group of individuals voice their desires on how they would edit them to fit their situation. This method is suitable, especially if coordinated with an experienced cooperative development professional (these people are typically located at land grant colleges and cooperative development centers in each state). 

    There is one potential drawback to the face-to-face development scenario, and that is ensuring that all members have voiced their concerns.  To this end, the South Carolina Center for Cooperative Development developed an online cooperative development tool called “The Cooperative Challenge.” A link to this survey is located here https://clemson.ca1.qualtrics.com/jfe/form/SV_aeCSaXEpEKJp3GS

    Participants can take this challenge to see how they will work together; the best part is that it is anonymous and involves a hypothetical cooperative, not their specific cooperative.  Producers can voice their concerns without being singled out.  To date, this tool has been used with three groups to help them discuss the more difficult cooperative development topics.  Some of the most controversial questions are:

    • Patronage dividends: how much will be distributed versus retained by the cooperative?
    • Capitalization: how much debt versus equity contributed by members?
    • How restrictive should the cooperative be with members selling outside the cooperative?
    • How does a new member join the cooperative, and how does a member leave the cooperative?
    • Should the cooperative accept products from non-members to fulfill contractual obligations?
    • What measures should be taken if a member does not follow the rules, such as selling outside the cooperative or not delivering acceptable produce?
    • How much should the cooperative pay a general manager, and what benefits are provided?

    The survey findings will be analyzed within the next year to see how different groups responded to the same questions. It will be interesting to note if there are differences in the concerns of conventional farmers versus niche-product farmers, new farmers versus established farmers, and those relating to different product types (i.e., organic produce). In the meantime, this survey tool is available for interested producer groups and cooperative extensions.  Also, if needed, a QR code is available so that this survey can be taken using a mobile phone.  

    Richards, Steven. “Interested in Forming a Cooperative? Take the Cooperative Challenge!” Southern Ag Today 3(22.5). June 2, 2023. Permalink

    Photo by RDNE Stock project: https://www.pexels.com/photo/variety-of-fruits-and-vegetables-8540920/

  • Marketing Locally Raised Meats? Lessons Learned in South Carolina        

    Marketing Locally Raised Meats? Lessons Learned in South Carolina        

    For the last three years, Clemson Cooperative Extension has been heavily involved in researching local meat supply and demand. Extension associates interviewed and surveyed livestock producers, processing facilities, and local meat consumers. As a result of this research, South Carolina is the most recent of the southern states[1] to invest in expanding local meat processing. 

    Assuming these investments solve local processing bottlenecks, the consumer demand study results are now the most important piece of the puzzle: will consumers purchase additional amounts of locally raised meat? The South Carolina consumer study seeks to provide direct-to-consumer livestock producers with additional marketing information for locally raised beef, chicken, pork, turkey, lamb, and goat. A summary of the results:

    Consumers of locally raised meats

    • Consumers tend to be younger (<45 years of age), reside in larger households, have higher educational attainment and household income, and are long-term residents of South Carolina.
    • Local meat consumers are generally willing to pay up to a 24% premium for locally raised meats to eat at home, and this holds true for all meats studied. 
    • Beef is the most popular local meat consumed, which is different from overall US meat consumption, where chicken is the most consumed meat.
    • The most desirable attributes of local meats are hormone-free, all-natural, no antibiotics, and grass-fed. Knowing the farmer was the lowest ranked, or least important, attribute.

    Marketing challenges and opportunities for locally raised meats

    • Stated barriers to purchasing (or purchasing more) locally raised meats are product unavailability, high prices, food safety concerns, convenience, and ease of preparation.
    • Consumer-preferred buying locations (ranked) were grocery stores, directly from farms, farmers markets, butcher shops, and online orders. 
    • Most consumers are unwilling to drive more than 20 miles to purchase locally raised meat.
    • Due to the first three bullets in this section, availability becomes a larger issue: locally raised meats are not typically offered in grocery stores, consumers are unwilling to drive to remote farms, farmers markets have limited days and times of operation, and there are relatively few specialty butcher shops.
    • Ease of preparation is important, and most locally raised meats are sold frozen.  
    • Consumers are accustomed to seeing meats on display before purchasing, while many direct-to-consumer livestock producers at farm markets keep their meats in closed coolers.

    The full study, with additional findings and research, is published in an open-access journal at this link https://doi.org/10.5304/jafscd.2023.122.009.  Also, please feel free to contact the author with any questions.

    [1] According to the Niche Meat Processing Assistance Network (www.nichemeatprocessing.org), Arkansas, Kansas, Kentucky, Missouri, North Carolina, and Oklahoma have also invested in local meat processing facilities.

    Richards, Steven Todd. “Marketing Locally Raised Meats? Lessons Learned in South Carolina.“ Southern Ag Today 3(17.2). April 25, 2023. Permalink

    Photo by Pixabay: https://www.pexels.com/photo/agriculture-animal-beef-bull-301600/

  • Locally Raised Meats: Cooperatives Needed

    Locally Raised Meats: Cooperatives Needed

    As a result of COVID-19 grocery store shortages, federal and state governments are investing in local food systems with meat processing high on the list. However, once local meat processing bottlenecks have been relieved, additional obstacles will need to be overcome. Clemson surveys of consumers and restaurants in 2020 and 2021 reveal that additional obstacles for increasing local meat sales are availability, price, and inconsistent quality1.

    A lack of availability points out that there are not enough sales outlets for local meats and purchasing local meats is often inconvenient for potential customers. For instance, most local meat consumers visit a farmers’ market once a month2 yet shop at a grocery store 2-3 times per week3. Even the most dedicated local food consumer sources less than 50% of their groceries from local producers4. For local meats to grow long-term, producers must work together to supply grocery stores and restaurants while addressing the remaining issues of quality inconsistency and price.

    One of the best ways for farmers to work together is to form a cooperative or similar collaborative business arrangement. Through collaborative business arrangements, local meat producers can adopt quality guidelines, provide a consistent supply to more sales outlets, and operate at a more efficient scale (possibly becoming more price-competitive). In short, business collaborations will give local meat producers a shot at gaining and maintaining a competitive position in the market.

    For more information about cooperatives and collaborative business formation, contact a land grant university or cooperative development center in your region. Contact information for USDA rural cooperative development centers can be found at this link:

    https://www.rd.usda.gov/sites/default/files/cooperative_development_centers_february2022.xlsx

    References

    1. Richards, S. (2021). National Restaurant Buyer Survey Results. Clemson University (Unpublished report). Copy in possession of the first author.
    2. Richards, S. (2020). Local Meat Consumer Survey Results. Clemson University (Unpublished report for Berkeley Electric Cooperative and the South Carolina Cattlemens’ Association). Copy in possession of the first author.
    3. Ver Ploeg, M., Larimore, E., & Wilde, P. (2017). The Influence of Food Store Access on Grocery Shopping and Food Spending. ers.usda.gov
    4. Cicatiello, C. (2020). Alternative food shoppers and the “quantity dilemma”: a study on the determinants of their purchases at alternative markets. Agricultural and Food Economics, 8(1). https://doi.org/10.1186/s40100-020-00160-6

    Richards, Steve. “Locally Raised Meats: Cooperatives Needed“. Southern Ag Today 2(11.5). March 11, 2022. Permalink