[MUSIC PLAYING] SPEAKER: All right. Next, we have the Eden Valley Growers group.
JOEY KUMMER: Hi, everyone. Today we'll be talking about the work that we've done with the Eden Valley Growers Cooperative. My name is Joey, and I'm here today with my colleagues John and Juul.
JOHN ROGERS: So Eden Valley Growers is a small cooperative based out of Eden, New York, just South of Buffalo. It was founded in 1956. So it has some age to it.
It originally started with 23 different member farms. And since then-- it had quite a small portfolio-- it's grown to be have a quite large portfolio in the growing industry. It has quite a diverse portfolio, growing 45 different specialty vegetables. The ones that they sell in the highest volume include sweet green peppers, cabbage, corn, and cucumbers. However, they're as diverse as growing grapes and microgreens.
Currently, they've experienced the same thing that everyone else in the agricultural industry has experienced with consolidation. So they currently have nine member farms, which is quite a difference from the founding 23. However, still have 22 members owning class A stock-- that's voting stock-- in Eden Valley Growers. This is mainly comprised of different entities that own the different farms. So that's family members that have come into of the maintaining original 23 member farms family members that have grown into ownership in those.
Next slide. So services and operation. So Eden Valley Growers provides a wide variety of services to their members. This includes cooling, marketing, and trunking. So essentially the cooperative tries to make sure that a farmer doesn't have to deal with their produce that they provide to the market once it leaves their farm.
So they provide trucking from the farm to Eden Valley's facilities. Their facilities, once they leave the farm they get cooled. So fresh produce, when it leaves the farm it needs to be cooled and enter to the retailer pretty soon after that. So Eden Valley Growers provide schooling for all fresh produce for all farmers as long as they sign up for it and they pay the fee for cooling, which is a reduced fee for members. They do provide cooling for other people as well who aren't members at a higher cost.
Marketing-- so if a member decides to market their produce through Eden Valley, they can. And that basically means Eden Valley will sell their produce to retailers on their behalf. Usually Eden Valley is able to sell that produce at a higher market price than on the CME just because of producer's overall higher quality standards than the regular producers.
And then trucking, once again they provide trucking from Eden Valley's facilities to the retailers. With that, Eden Valley growers actually shipped 60% of its produce locally. So that's within the Buffalo area and all of Western New York. The other 40% is sold all across the Eastern Coast of America. This ranges as far North as Maine, as far South as South Carolina, and as Far East as Kentucky and Tennessee.
And then, more recently Eden Valley growers has been established as a Western New York Food Hub. This is essentially a USDA-funded, grant-funded program that promotes local food production. With the increased demand in local produce recently, USDA and other organizations such as Western New York Food Hub have been all about promoting local producers having access to wholesale markets, which is something Eden Valley is very well focused in.
So methods-- when we set out to work with Eden Valley, we really want to understand the cooperative first. So we had a point of contact, Dave Walczak, with them. We set up a weekly meeting with him through discussion. COVID was a really turbulent time for them, also a very busy time. They experienced a lot of growth and reduction in production at the same time.
So we really thought that they wanted to get a better grasp of the opinions of the cooperatives as a whole. So we actually created a 28-question survey that was distributed to the members. It was designed to be something quick that they could fill out in 15 or 20 minutes-- not take up too much of their time. Because farmers right now, especially their growers, are extremely busy during this time of year on top.
We received 13 responses, which we thought was a pretty good response rate considering we gave them a week and a half to fill it out. With that, we also conducted interviews with five different members of the cooperative. It was five different people that Dave gave us to contact. They were a variety of different growers in different positions within the cooperative. It gave us a really good scope of the different ideas and viewpoints of the cooperative.
After we completed all these things, we had a brief meeting with Dave-- or while we were completing these things we had a brief meeting with Dave where we discussed preliminary results of the survey and some of the interview responses. As the survey finalized its results we created a written report of the results. And then, based on that, we created a couple of recommendations of where to go from here and future projects that could possibly be created or worked on based on our survey results.
As you can see, in the bottom corner, we have an example prop, example from the survey. So these were questions that were designed not to have too much-- I guess enough thought put into them but not too much effort to respond.
JOEY KUMMER: And diving a little bit more into what we were looking for in the survey and the kinds of things we were asking for, first, just to get a better sense of the makeup of the cooperative and the membership than some of the initially available information. Of the respondents, they had generally between 1 and 6 members of the cooperative per farm, holding either just class A voting shares or class A and class B nonvoting shares.
The size of the farms ranged from as small as 25 acres to over 400. And all of the members who responded to the survey either expanded their operations to include more land or maintained their size since joining. And again, a lot of range in size of the different member farms. Growth sales over the last year from the members who responded could have been as little as $90,000 and as high as about $8 million.
Some of the things that we heard from the members that they really liked about the cooperative that we didn't think needed to change were the voting system that they currently have. A lot of cooperatives will base their voting and, I guess, member different levels of power based on how much they patronize the cooperative. Instead, Eden Valley assigns one vote to each holder of class A shares of stock. So those are restricted to either the owners or main operators in each farm. So again, like was mentioned before, some farms will have multiple class A voters. But instead of assigning voting by patronage, it's by individual holding these shares of stock.
They also like with everything localized kind of in the Western New York area how accessible the facilities are to membership and how convenient it is for them to use. Some of the members talked to us about how it was kind of a no-brainer to join just because some of their extra vegetables that they're growing maybe on the side of some other main crops are just so easy to give to the cooperative and not have to worry about it anymore, as opposed to marketing and doing all the trucking and selling themselves. They also really appreciated having the other members of the cooperative available to them, just kind of building those relationships with other growers in the area.
Some things that maybe not that they disliked about the cooperative but that they felt might have some room for improvement and more communication-- a lot of members felt that some of the things like the financial status of the cooperative weren't being communicated as clearly as it could have been to the membership, as well as a little bit more detail could be included in the meetings of the board of directors minutes-- the minutes of the Board of directors meetings. So just kind of it's increasing the communication from the top down in the cooperative was something that the membership felt could be improved upon, and that's something that we've been communicating with Dave and the rest of the management cooperative.
One other thing that was mentioned, I believe by a member of the board, was that the agendas didn't always include all of the information being brought before the board during each meeting. So just improving on that as well could help. And then, the other main issue that some of the members saw was different levels of participation from different members.
And it should be noted, about midway through the semester, one of the main issues that seemed to come up was with a large member who at one point was contributing a lot of what the cooperative sells. And since then they have kind of decreased their production, and now they're nearly not patronizing the cooperative at all. But they still hold a lot of class A voting shares within their farm.
But through our discussions with the rest of the membership and a few members of the board of directors over the last few weeks, we've discovered that this is not really as much of an issue. It's kind of trending towards something that's going to resolve itself. So it wasn't something that we needed to focus as much energy on.
JUUL LOONEN: I think it was a unique situation too, as we discussed about it, where there's only so much you can do because of the way the bylaws were written and how it was founded-- I believe he was a founding member as well. So through discussion with a lot of people we were able to talk about it with, it just really was not something that we wanted to focus because of unique the situation was.
So conclusions and the recommendations, we wrote a lot about this in our write-up. But to briefly go over some of them, I think literature to develop for new members, that was something-- I actually was able to interview one of the newer members, I believe in the past year he joined. He was also a member of National Grape-- fun fact.
So he was a smaller grower, and he was a little further away. And he said, one of the things is that once he joined, he kind of wasn't up to speed and was trying to learn as he went. He didn't really understand fully how the cooperative worked. Especially for him, he's one of the growers that's a little further away. So I think something in the literature and also maybe having someone guide them is something that could be really useful in terms of that communication piece-- getting the new people or members in general to understand everything about the cooperative.
And I think that wasn't just new members as well. It was some members are just sort of bringing their produce, and I think having that connect will help with the participation. A lot of that can be really resolved with better communication.
So the other thing we discussed was really just improving the minutes-- make it more digestible, include pertinent information. And that way members are more informed. I think that's a really important piece we discussed, including especially the agenda. It's on the directors to make sure there's preparation for those meetings. And so, they really need to be putting in the work for that.
So members, especially when they're busy-- because they will hold the meeting in the summer typically-- they need to show up knowing what's going on so they can come informed and be ready for the issues at hand. So that was a big one. And like I said, membership participation is probably going to improve with this communication. That's just something we noticed was maybe just a little bit of a lack on the membership side. And obviously, this is a cooperative, it's very important. So that communication was sort of the focus of our recommendations to the cooperative.
So something when we were discussing with people that I think moving forward would be great is looking at expansion. And I think a lot of people had different ideas when it came to this. I know some people-- I talked to directors-- value added growth was a big one that came up. One of the people I talked to was membership growth.
But the counter that-- some say people say it's little harder because they have a lot of members where they are, and as soon as you start going further away it's a little harder to truck to the facility and then outward. So I think that's something really looking for future growth is where can that be. And we hinted that in our write-up, our conclusions is if you can improve your sort of internal side and governance, then that will help you move forward and look outward.
Because I think everyone knows that the future of the cooperative isn't we're going to stay where we are now. And I think moving forward a project in the future, looking at this specifically would be a really good opportunity. And also, new member orientation-- that's something that someone could look at moving forward-- is really how to sort of take that information about what it is to be a new member, and the bylaws, and sort of make something available for them.
So those were some of what we saw moving forward from the cooperative.
JOEY KUMMER: If anyone has any other questions, we'd be happy to answer them now.
AUDIENCE: So you talked about the issue with that one member that was in the process of getting resolved, but you also said, if I understood correctly, that the bylaws didn't allow that to happen or the founding documents. Are they in the process of reviewing or reviewing and revising their bylaws or have they touched-- haven't they made any revisions on the bylaws recently?
JOEY KUMMER: It's not as much that the bylaws don't allow that, it's just that there's nothing specifically written yet for this situation. So going forward, if it becomes more of an issue, then it might be something that they look at. But it seems to be kind of a one-off situation at the moment, and it's trending towards-- since the member is are not patronizing anymore, they're not getting as many of the full patronizing member benefits of the cooperative. Some of the precooling fees are higher, for example.
So as it moves forward, it's trending towards either they're just going to maintain the situation and still be paying the higher fees, which won't really be that much of an issue for the cooperative. Or they're going to reach a point where they're not seeing the benefits of membership anymore. And since they're not seeing those benefits, they'll be going to the board and saying, why am I still member if I'm not getting these benefits, and then they'll move into a negotiation for either reclassifying their voting shares into class B, just to have that investment still, or being bought out entirely.
AUDIENCE: Is Dave or anybody from Eden Valley Growers up on Zoom?
JOEY KUMMER: They weren't available to make it today.
AUDIENCE: They weren't? OK? All right. Great job. As we know, longer-serving businesses have to continually evolve in terms of their governance and improving their member communications. So this was a clear example of that.
I would note that probably the larger farms likely have more members in the coop, right? So emphasizing one member one vote is one thing, but it's certainly not one farm one vote in this case. And I wonder if that had come up at all in the conversation.
JOHN ROGERS: So in the conversation that we had yes and no. Because the larger farms have multiple farm entities underneath them. So I spoke with one member of the board of directors, where he had, I think, three or four different farms underneath. His sons and daughters had two or three different farms. And so, he viewed them all as-- or I guess they're under the books as one entity, but they're also several different farms--
AUDIENCE: Separate farm.
JOHN ROGERS: --that are run differently by different people.
AUDIENCE: All right. Great example of getting input directly from members in terms of communications, how board members can be more prepared. Give me all the information before so we can have an efficient board meeting if I'm just seeing it at the board level. So great job, guys. Let's give them another hand.
[APPLAUSE AND MUSIC]
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Part of the
Grand Challenges curriculum, Cooperative Business Management (AEM3260/5260) focuses on engaged learning with community and cooperative clients.
In May of 2022, ten student project teams presented the results of their semester-long work with community partners. Professor Todd Schmit evaluates.
Project title: Governance systems andmember heterogeneity
Community Partner: Eden Valley Growers
Student Team: Joey Kummer, Juul Loonen, John Rogers