Category: Specialty Topics

Cooperatives are formed based on some collective economic need, for example, to combat unfair market power, to gain cost efficiency, or to access supply chain services that might not otherwise be available. Despite their ability to overcome these challenges, a traditionally structured cooperative might have difficulty growing and sustaining a profitable business in certain situations.

Cooperatives that are formed to further process commodities into branded food products have added challenges. For example, a cooperative of wheat farmers that would manufacture and market pasta may face sizeable capital requirements and a require a consistent flow of production. A traditional cooperative model with open-ended commitments from its members may not be geared to these needs. Food processing facilities are designed for a specific capacity and may not operate profitably if forced to purchase unneeded inputs in a surplus year or to operate below break-even in a short crop year. Furthermore, lags and disturbances in the distribution of value-added, branded products may alienate wholesalers, retailers, and consumers, resulting in lost sales and reduced access to retail shelf space.

Does this mean that agricultural producers can’t cooperate in these value-added markets? No, there is an alternative. A “new generation cooperative” differs from a traditional cooperative in a few important ways: 

1. Membership is closed
2. Participation is contracted
3. Member equity is tied to investment, not use
4. Ownership is transferrable and can appreciate/depreciate in value

Closed Membership

Membership in the new generation cooperative is determined by purchasing a limited number of shares. Each share allows its holder to deliver a specified amount of their crop to the facility. The number of shares available is determined by the annual production needs of the facility. The sale of all shares covers the equity investment needed for the cooperative. 

Contracted Participation

The purchase of a share in a new generation cooperative provides the right to deliver a specified amount of a commodity, but also the obligation to deliver the commodity. This ensures the cooperative that it will receive the required amount of input. Members who did not grow enough of the commodity to fill their obligation can make up the difference by purchasing the commodity on the open market. 

Member Equity

Because the cooperative requires the purchase of shares to do business with the cooperative, equity is received up front, and not tied to participation from year to year. This gives the cooperative an added degree of security and resilience.

Value of Ownership

In a traditional cooperative, profits are allocated to members based on their use of the cooperative. A portion of that allocation is paid to the member in cash, and the rest is held by the cooperative in the member’s name. These “book credits” represent the member’s equity ownership of the cooperative and will be redeemed at some unspecified time in the future at face value. The equity investment in a new generation cooperative lies in the up-front purchase of shares. These shares are transferrable at market value.

The new generation cooperative provides an alternate business form that might help groups of producers seeking to enter value-adding industries. Interested groups can contact their lawyer, accountant, or cooperative Extension specialist for more information.

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Park , John. “What is a New Generation Cooperative?” Southern Ag Today 4(9.5). March 1, 2024. Permalink

Unlike urban areas with a plethora of law offices and legal aid organizations, rural communities often lack the necessary infrastructure to provide essential legal support. This gap can leave individuals without the means to address crucial legal issues, ranging from family matters to property disputes. A “rural legal desert” refers to areas where residents face significant challenges in accessing legal services and representation. 

We recently collected firm-level data from 2014-2021 from more than 350,000 law offices (Figure 1), together with socio-demographic data for 3,108 counties in the continental U.S., to statistically quantify the scope of the rural legal desert problem and shed light on potential solutions. Additionally, we examined the implications of limited rural legal representation on various societal factors, including rural poverty, economic development, and social equity. 

Figure 1: Legal Employees Per 1,000 Individuals (2021)

Assessing the Problem: We found that—when evaluated on the basis of legal employees per capita—urban communities have approximately 150% greater access to legal services than those in rural areas (Figure 2). According to our data, Arkansas, Mississippi, and New Mexico are among the states where the problem is most severe. Worsening the situation, this trend is escalating over time: legal practices are becoming more concentrated in densely populated cities rather than being dispersed across both urban and rural areas.

Figure 2: Access to Legal Services Across the Rural-Urban Continuum (2021)

Even among rural communities, our analysis highlights a stark inequality with respect to legal access. We found that poorer rural communities have significantly less access to legal services than comparable rural areas with higher per capita incomes. Further, communities with larger shares of minority ethnic groups also experience statistically inferior coverage of legal services compared to areas with predominantly white, non-Hispanic populations. This social-inequality barrier to rural legal access is most substantial for Native and Black Americans, but also exists for Latinos.

Bridging the Justice Gap: Our findings highlight the need for targeted policy interventions and innovative solutions to address the rural lawyer shortage. One policy intervention that appears to have been successful is Project Rural Practice (PRP) established by the South Dakota Legislature in 2013. The PRP program provides incentive payments to attorneys who commit to serving five continuous years of practice in an eligible rural county. This program improved legal representation in rural South Dakota, both relative to rural areas of Iowa and relative to urban areas of South Dakota evaluated over the same time period. 

Final Thoughts: Recognizing the unique legal challenges faced by rural areas is a necessary step in the move towards a more equitable and inclusive justice system that ensures equal access to justice for all individuals, regardless of their geographic location.

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Schaefer, K. Aleks, and Andrew Van Leuven. “Confronting Legal Deserts in Rural America.” Southern Ag Today 4(8.5). February 23, 2024. Permalink

The economics of the ever-evolving landscape of the US specialty crop industry demands a comprehensive understanding of the factors influencing competitiveness. In this article, the author identifies key economic drivers impacting the sector and emphasizes the imperative for resilience, innovation, and strategic choices as opportunities available that may improve sustainability of specialty crop stakeholders in the United States.

Distinct Economic Factors Shaping US Specialty Crop Industry Competitiveness

Dynamic Market Windows

The market for specialty crops is characterized by its fast-paced nature and a continuous narrowing of windows for product availability. Compounded by a widening gap between processed and fresh produce prices, growers face the additional challenge of meeting retailer demands for product homogeneity and year-round supplies. This underscores the need for agility and responsiveness in the face of evolving market dynamics.

Labor Costs and Dynamics

A significant demand for farm workers in the production, harvesting, and packing of fresh, higher-valued crops is evidenced by the increase in H2A certifications from approximately 48,000 in FY 2005 to 370,000 in FY 2022 (Figure 1). Despite this shift, total employment across produce operations has seen minimal growth in recent years. The surge in H2A certifications, particularly in southern states, highlights the industry’s dependence on seasonal labor. Addressing labor challenges continues to be a critical factor for maintaining economic viability.

Perishable and Seasonal Challenges

Limited access to land and water suitable for high-value fruit and vegetable production poses a substantial challenge. Genetic packages for many fresh vegetables prioritizing shipping and storage needs and disease and pest pressure reductions, and while crucial concerns, may come at the cost of product quality and nutritional value, further reducing consumer demand.

Consumption Trends and Health Implications

US consumers’ declining consumption of fruits and vegetables over the past two decades, coupled with a shortfall in meeting recommended dietary guidelines, raises concerns for public health (Figure 2). Strategies to bridge this gap involve not only production considerations but also consumer education to expand palates and encouragement to add produce to their diets to support health and wellness.

Global Network Exposure:

The heightened supply chain risks, driven by regulatory changes and increasing costs related to carbon emissions, underscore the industry’s vulnerability. The lag in grower adoption of automation technologies highlights the need for the industry to embrace innovation for increased efficiency and competitiveness. Researchers and educators need to find ways to improve knowledge of the value added from tech solutions and, more importantly, function as intermediaries to bring producer and market needs back to the tech developers.

Figure 1. The number of H-2A jobs certified increased more than sevenfold from fiscal years 2005 to 2022.

Figure 2. Estimated average U.S. consumption compared to recommendations, 1970 to 2018.

Stay tuned for Part 2: Economic Choices for US Specialty Crop Industry Success!

In today’s digital age, where 87 percent of consumers turn to Google to discover and assess local businesses (Paget, 2023), it’s evident that such an online presence as a website plays a pivotal role in shaping consumer purchase decisions. The process mirrors this trend when seeking information about a local farmers’ market: potential visitors will likely “Google it” and then carefully assess the market’s website. The website experience becomes a decisive factor, influencing consumers’ choices on whether to make the trip or explore alternatives. Like businesses, farmers’ markets need to recognize the profound impact of their online representation, understanding that consumers’ evaluations of farmer’s markets often begin with a visit to their digital storefronts.

Having evaluated small business, agribusiness, non-profit, and personal brand websites for more than a decade through the Bricks-to-Clicks Marketing Program, it is apparent that specific elements are crucial in persuading consumers to engage. For farmers’ markets, where 8,720 establishments in the U.S. connect growers directly with consumers, the importance of a well-designed website becomes even more pronounced. 

According to the USDA’s Agricultural Marketing Service, the total annual sales at farmers’ markets are estimated at $1 billion. This raises a critical question: could growers increase sales if farmers’ market websites were more effective at attracting consumers? A compelling online presence could be the key to unlocking more significant sales potential for growers and farmers’ market organizers. Here are seven elements a farmers’ market website should include to attract customers. 

Element One

An effective website should include an easy-to-understand tagline. Look at this example from Elgin, Texas: https://www.elginfarmersmarket.com/. The tagline is “Buy Local, Eat Fresh.” The purpose of the tagline is to communicate the value of buying at the market quickly. With this tagline, it’s easy to understand that buying local, fresh food is the main message. 

Element Two

Visually display the success customers will experience when they visit your market. What are the benefits of visiting your farmers’ market? If access to fresh food is essential, use high-quality images showing people interacting with growers to entice customers to visit. Look at this example from Wichita Falls, Texas: https://farmersmarketwichitafalls.com/. It’s easy to see many consumers enjoying their experience. The same applies to this example from San Francisco, California: https://www.ferrybuildingmarketplace.com/farmers-market/. The ideal visual display also includes images of happy, smiling people enjoying the market. 

Element Three

Provide bite-sized categories to explain the products sold at your farmers’ market. Retake a look at the San Francisco, California site: https://www.ferrybuildingmarketplace.com/farmers-market/. Scroll down, and you’ll see bite-sized examples of what’s available at their market, including Tuesdays and Saturdays. For a farmers’ market, it’s more straightforward to communicate what happens each day of the week when the market is open. But the main thing is to be clear about the products sold at the market in easy-to-understand terms. Otherwise, consumers get confused, and they won’t visit the market. 

Element Four

Showcase when your farmers’ market is open. Every farmers’ market is different regarding the days and hours it is open, which means clearly communicating available days and hours is critical to success. This information should appear in the header section of your farmers’ market website. The header is the first section of website content. Look at this example from Starkville, Mississippi: https://starkville.org/things-to-do/starkville-community-market/. The website header displays when the farmers’ market is open clearly and concisely.

Element Five

Use call-to-action buttons to engage consumers and vendors. When consumers visit a farmers’ market website, it is critical to call them to action to show the experience they can have. For example, a clear call to action button in the header section of the website might be “Plan Your Visit” or “Virtual Tour.” The virtual tour button could provide a short, high-quality video showing consumers enjoying their visit at a farmers’ market. The Plan Your Visit button could list vendors, upcoming events, lodging, restaurants, and more. The idea is to invite consumers to take a step toward planning a visit to their local farmers’ market. 

A call-to-action button should also be present so vendors can easily apply to sell at the market. A simple button could be labeled “Become A Vendor.” This button could lead growers to an online application to sell at the market. A website programmer could easily build a website to feature both buttons side-by-side in the header of a farmers’ market website. Here is an example of a local food business in Tennessee that uses a two-button design in its website header: https://brownbagnow.com. 

Element Six

Build an email list. An effective farmers’ market website should also help build an email list that a farmers’ market manager could use throughout the year to promote upcoming market activities. Lead generators often appear on websites to capture visitor email addresses. A lead generator is content offered freely on websites to encourage consumers to share their email addresses to download the content. Building an email list requires presenting an effective lead generator to pique consumer curiosity and promote downloading free content. The idea is to offer consumers enough value in the free content that they want to exchange their email addresses for access. 

A practical method of offering a lead generator on a website is to activate a site’s pop-up feature. When a consumer visits a farmers’ market website, a pop-up could be made to appear after a specified amount of time (usually 5-10 seconds) and offer access to the lead generator. If the consumer provides an email address, she gains immediate access to the lead generator.

As for creating lead generators, many options exist. A market could offer a coupon for 10% off any item or access to a monthly newsletter update of market vendors and seasonal activities. Also, some farmers’ markets may want to develop a free PDF document with the main benefits or attractions available for immediate download. Here is a list of three potential lead generators for the Starkville Farmers’ Market in Mississippi, but each of these could be adapted for any farmers’ market. These include:

• Win a Bounty Bag of Fresh Delights: Download Now and Enter Our Drawing for a Chance to Taste Starkville’s Farmers’ Market.

• Craving Local Delights? Here Are 5 Things You Need to Know About Starkville’s Farmers’ Market. 

• Sip, Shop, and Savor: 3 Reasons Starkville’s Market Is a Culinary Haven.

Element Seven

Keep them in the loop. If a lead generator does its job, a farmers’ market will gain access to new email addresses. The problem is most may do this part and fail to remember to engage with these new email subscribers during the year. Instead, develop a set of automated emails explaining the market’s main attractions, seasonal activities, entertainment, and food options throughout the year. Include some emails featuring testimonials. Here are five automated emails that can keep your farmers’ market customers informed:

• Deliver the lead generator. Send a short email and give consumers the lead generator you promised. Keep it short and sweet. 

• Feature why your market is unique. Send a short email about the main reason your market is unique. Your tagline on your website should summarize this, but in this email, explain the details of it. People want to know “why” they should visit one market versus others.

• Explain seasonal activities. Send a short email explaining the seasonal activities you deliver at the market. Include one testimonial in this email as well. 

• The behind-the-scenes tour. Send a short email this time that includes a short video of a farmers’ market manager working with vendors at the market, welcoming visitors, and so on. Make this a guided tour featuring the farmers’ market manager as the spokesperson. 

• Feature three testimonials. Send a short email to three people who have given you positive testimonials about why they love visiting the market. These can be quotes or videos. 

Seven Elements Checklist

Use this list to evaluate if your farmers’ market website is prepared to attract customers. 

• Does your website have an easy-to-understand tagline? 
• Does your website visually display the success customers will experience when they visit the market?
• Does your website provide bite-sized categories to explain the products sold at the market?
• Does your website showcase when the market is open? 
• Does your website feature call-to-action buttons to engage consumers (e.g., Plan Your Visit, Virtual Tour) and producers (e.g., Become A Vendor)? 
• Does your website offer a lead generator to build your email list? 
• Do you deliver automated emails after consumers download your lead generator to keep them in the loop? 

In the era of digital search, farmers’ markets must recognize that the first impression is often a digital one. That’s why it’s imperative for farmer’s markets to understand the pivotal role websites play in shaping perceptions and driving engagement. Remember: A click on a farmers’ market website is the modern-day visit, and a well-crafted farmers’ market website serves as the virtual gateway to the vibrant world of fresh, locally produced foods, connecting growers with a broader consumer audience eager to embrace sustainable living. By effectively integrating these seven elements, your farmers’ market website can showcase the diverse range of locally sourced products available, helping attract more consumers and increase grower and market revenues.

If you are ready to develop a farmers’ market website that attracts customers, enroll in the Bricks-to-Clicks Marketing Program’s Master Your Marketing Online Course at Mississippi State University. Dr. Barnes teaches this live one-day marketing workshop where you will learn how to develop a farmers’ market website, lead generator, and email series to attract consumers to your farmers’ market. The next class starts on February 6, 2024. To be notified when registration opens, complete this form.

References

Paget, S. (2023). Local consumer review survey. Available at https://shorturl.at/kBFLU.  

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Barnes, James. “Seven Elements Your Farmers’ Market Website Should Include to Attract Consumers.” Southern Ag Today 4(3.5). January 19, 2024. Permalink

Being elected to the board of directors for your local cooperative can be an intimidating experience. An agricultural cooperative may have some fundamental differences from a farm operation that makes it difficult for new board members to assess and direct. Part of these differences are due to business activities in adjacent parts of the supply chain. Additionally, cooperatives have unique financial and legal issues that use unfamiliar terminology, adding to the confusion. 

Not surprisingly, education is a hallmark principle of cooperation. Many states offer educational programs for cooperative directors through their state agricultural cooperative council. Other resources for education include the farm credit system members and, of course, your state Extension service. Many of these offer traditional programs over 1-3 days, with speakers and workshops covering a variety of topics. Programs such as these continue to be widely available and appreciated. 

However, directors are increasingly requesting alternative educational opportunities with online delivery. On-demand education is often a better fit for modern directors seeking a better balance of time devoted to home, business, and life in general. The pandemic of 2020 taught many boards that a lot of their activities can be effectively conducted online if needed. In response to this, a group of Extension specialists from across the nation established the Cooperative Director Foundations Program. This program provides 15 hours of training across 23 learning modules, targeted to directors of agricultural cooperatives. The course is available from Thinkific, on an online learning platform. 

Directors needing cooperative specific training are encouraged to speak to their state Extension specialist for cooperatives and to check out the Foundations course on the Thinkific website at http://cacdd.thinkific.com.

Further Reading

Boland, Michael A., Kopka, Christopher J., Jacobs, Keri, Berner, Courtney, Briggeman, Brian, Elliott, Matthew, Friend, Diane, Kenkel, Phil, McKee, Greg, Olson, Frayne, Park, John L., Secor, William, Schweiss, Kristi, Scott, Hannah and Worley, Tom, (2022), Extension Programming During a Pandemic: The Cooperative Director Foundations Program, Applied Economics Teaching Resources (AETR), 4, issue 2, number 321906.

https://www.aetrjournal.org/UserFiles/file/AETR_2022_001RR%20V4I2.pdf