April 1, 2025 • 35 mins
How do cooperatives enhance stability, resilience, and profitability in the grain industry? In this insightful episode of the Whole Grain Podcast, host Jim Lenz sits down with Dr. Keri L. Jacobs, Associate Professor of Agricultural and Applied Economics at the University of Missouri and Executive Director of the Graduate Institute of Cooperative Leadership (GICL).
Dr. Jacobs offers a deep dive into the pivotal role that cooperatives play in supporting grain producers, strengthening local economies, and ensuring the long-term success of agricultural supply chains. From managing volatility in grain markets to advocating for producer interests, cooperatives offer critical solutions that balance market power while creating shared value for members.
Curious about how cooperative governance and leadership impact grain operations? This episode explores how effective cooperative boards and leadership teams can drive innovation, manage risk, and position their organizations for future success. Dr. Jacobs also highlights the importance of leadership development through GICL, which equips cooperative leaders with the knowledge and tools needed to navigate today’s complex agricultural landscape.
Episode Highlights for the Grain Industry
- The impact of cooperatives on grain supply chain stability and producer profitability
- How cooperatives help mitigate price volatility and market risk for grain handlers
- Governance models that strengthen cooperative resilience and operational success
- Challenges and opportunities for cooperatives in grain storage, transportation, and processingInsights into GICL’s role in developing strong cooperative leaders for the grain industry
- Why continuous education and leadership development are key to cooperative success
About Our Guest: Dr. Keri L. Jacobs
Dr. Keri L. Jacobs is an Associate Professor of Agricultural and Applied Economics at the University of Missouri and the Executive Director of the Graduate Institute of Cooperative Leadership (GICL). With a focus on cooperative governance, leadership development, and agricultural economics, Dr. Jacobs collaborates with cooperative boards, CEOs, and industry leaders to strengthen the effectiveness and resilience of cooperatives in the grain and agricultural sectors.
Links and Resources
- Dr. Keri L. Jacobs LinkedIn Profile
- Follow GICL on LinkedIn
- Graduate Institute of Cooperative Leadership (GICL) website
- Build Better Boards Podcast
Grain Elevator and Processing Society champions, connects and serves the global grain industry and its members. Be sure to visit GEAPS’ website to learn how you can grow your network, support your personal professional development, and advance your career. Thank you for listening to another episode of GEAPS’ Whole Grain podcast.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jim Lenz, GEAPS (00:02):
The landscape of agriculture is transforming
and cooperatives are at theheart of ensuring a sustainable
and resilient future for foodand fuel systems around the
globe.
But how do these cooperativesempower farmers, strengthen
communities and drive innovationin the supply chain?
Our guest today brings a wealthof expertise and perspective to
help us explore these criticalquestions.
(00:23):
Get ready for an insightful andthought-provoking conversation.
Let's dive in.
Hello and welcome to the show.
Welcome to the Whole GrainPodcast.
My name is Jim Lenz, your hostand producer of the show and the
director of global educationand training at GEAPS.
We're the mission of the GrainElevator and Processing Society
to champion, connect and servethe global grain industry and
(00:43):
our members At GEAPS.
We work to be the globalcommunity and thought leader for
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You now have access to the fanmail link or you can send me a
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That's , we may even featureyour comments on the show.
Our special guest in today'sepisode is Dr Keri Jacobs.
Dr.
Jacobs is an AssociateProfessor of Agricultural and
Applied Economics at theUniversity of Missouri.
(02:08):
Her expertise and passion forempowering cooperatives make her
the perfect guest to discussthe critical role of
cooperatives in global food andfuel systems.
In today's episode, we'llexplore the historical
significance and modern-dayimportance of agricultural
cooperatives, how cooperativesempower farmers and communities.
We'll also examine thechallenges and opportunities for
cooperatives in today'sevolving landscape.
(02:29):
Get ready for an engaging andinsightful conversation that
highlights the power ofcollective action in agriculture
.
Let's dive into theconversation.
(02:50):
All right, we have Dr.
Carrie L Jacobs.
She is Associate Professor ofAgriculture and Applied
Economics at the University ofMissouri and holds the Partridge
Chair in Cooperative Leadership.
In 2021, she was named theExecutive Director of the
Graduate Institute ofCooperative Leadership.
In her outreach role, Jacob'spartners with cooperatives and
their associations to create anddeliver director and talent
(03:12):
development programs incooperative governance and
finance, and to engage withcooperative boards and
leadership in strategic planningand through collaboration with
industry and key stakeholders,she pursues research that seeks
to inform and elevate producers'opportunities through
collective action within theirsupply chains.
Jacobs was raised on herfamily's hog and row crop farm
in eastern Iowa.
(03:32):
She earned her BA in economicsfrom Cole College and her PhD in
agriculture economics fromNorth Carolina State University.
That's why we are so excited tobring Dr.
Keri Jacobs here to the show.
Thank you very much, carrie,for joining us.
Dr. Keri Jacobs (03:47):
Thanks, Jim, I appreciate you having me.
Jim Lenz, GEAPS (03:49):
Well, it is great to have you because you
bring in a fresh new perspective, a topic that we have not done
today.
It's about cooperatives.
We're going to dig in thatdeeply.
But to start the show with abit of positive spirit, I
sometimes ask guests in theWhole Grain show if they have a
mantra or success quote thatthey live by professionally,
sometimes personally as well.
Dr. Keri Jacobs (04:08):
Yeah, that's an interesting question, and so
I'll share something.
I don't know.
I can see how it applies to mypersonal life at times as well,
or maybe in families, and I'mstealing this, by the way, I
have a gentleman I work closelywith.
His name is Richard Fagerlund.
We have a podcast together andhe's really you know, he's a,
he's a talent leadership guy,he's a strategy guy, and
(04:33):
increasingly in the work thatwe're doing, I realized how much
this resonates.
And it's this he says cultureis the sum of what you permit
and what you promote.
And so in board work that I doand that we do, you know, one of
the things we're really focusedon is the culture boards of
directors of agriculturalcooperatives, but others create
inside the boardroom, and so forme, that really resonates as as
just an important thing to keepin mind is that when you're
(04:55):
building culture and we allunderstand the one that
dovetails with this, jim, issomething that another friend of
mine says, and it's you knowshe turned me on to, but it is
that culture eats strategy forbreakfast, and so there's a lot
running around the culture realmor in the culture realm that I
think is so important to keep inmind in the work that I do
anyway.
Jim Lenz, GEAPS (05:15):
Thank you very much for sharing that.
So, carrie, many of thelisteners today have heard of
cooperatives.
Not all grain facilities arecooperatives, but many listeners
are associated withcooperatives in one form or
another.
Maybe a cooperative is theiremployer or again, they're
associated with that in thegrain industry in one way or
another.
To provide a big understanding,what is a cooperative?
(05:37):
Why are they important?
What's the history of them?
I think that'd be a good way tostart the show today.
Dr. Keri Jacobs (05:44):
Sure, so, at the very highest level, a
cooperative is an organizationthat is member owned, member
controlled and member benefiting.
So those three dimensions andyou can substitute the word user
owned or member owned, butspecific in this model has has
been applied in the?
U and worldwide to all sorts ofindustries, from the home
(06:05):
healthcare to house cleaning, totutoring, to rideshare, to
agriculture, financial, likecredit unions.
It's a model that has a lot offlexibility and I think today
we're going to speak primarilyabout agriculture and so,
therefore, agriculturalcooperatives and that's really
where my focus is and specialtyis how that applies to
agriculture is what that meansis these cooperatives are owned
(06:29):
by the members, the farmers thatuse them, so there's an
ownership piece there as anequity, and we can talk more
about that.
It means they're capitalized bythem, it means they're
controlled by farmers, sofarmers serve in the boardroom,
farmers are directors, they'reelected from the membership of
farmers who are members.
However, membership is definedand the purpose of to
(06:50):
agricultural cooperatives, whatthat means is control and
ownership and the purpose.
The organization is alignedaround its farmer members,
(07:11):
farmers and ranchers.
Jim Lenz, GEAPS (07:12):
That's a great introduction to this.
Thank you for sharing, Carrie.
Now you have a very special,unique background.
You certainly started in theagriculture area.
Kind of tell us a little bitabout your history and kind of
the work you're doing today.
Dr. Keri Jacobs (07:27):
Sure, you said this in the introduction.
I grew up on a family farm ineastern Iowa and my family did
business with the co-op in thatpart of the state.
It was Swiss Valley for a whileand now it's Innovative Ag
Services.
So as a farm kid I thought Iknew what a cooperative was.
I had kind of a unique path toacademia, kind of went and got
(07:48):
my graduate degree late and myfirst job out of grad school was
at Iowa State University.
Between my undergrad andgraduate work I was not in the
ag field and it was.
I guess you can take the kidoff the farm but you can't take
the farm out of the kid.
And I really wanted to get backto agriculture and that's why I
chose to do my doctorate work,an emphasis in agricultural
(08:10):
economics.
And when I started Iowa Stategrad school it was in a research
and teaching role related toagribusiness and so I was
getting to have that connectionto agriculture but really moving
into a role when I was at IowaState and now at the University
of Missouri where my job isreally focused, I have an
outreach and extension rolerelated to agricultural
(08:32):
cooperatives specifically andthe reason I love that is it
feels like every day in my job.
I get to work with farmers,usually as directors of
agricultural cooperatives, butit feels like I'm working with
my parents or my grandparents.
It's just a very comfortablething to do.
So it's how you know.
I think my eight-year-old selfwould have thought maybe I would
have been a farmer.
(08:52):
That's what I wanted to be, butthat wasn't in the cards for me
.
But what I get to do is I getto be in a role where I feel
like I can support farmersthrough their collective action
through agriculturalcooperatives.
It resonates with my upbringingand my value system and it's a
big honor to be able to do this.
Jim Lenz, GEAPS (09:09):
And you're driving big impact by the work
you're doing and the folks thatyou associate with.
That's terrific.
I hope so.
I hope so.
Now, how do cooperativesempower farmers and enhance
their collective bargainingpower?
Dr. Keri Jacobs (09:23):
That's a great question and it's one that is
relevant today, but it's beenrelevant for a hundred years.
So, if you'll allow me, I'mgoing to go back a little bit of
a history lesson, because Ifind this fascinating.
It's part of what, when I dooutreach to cooperative
employees, I want them tounderstand the foundations of
the agricultural cooperativeshere in the US and, I think, to
really understand why we havethem and the value they provide.
(09:44):
You really got to go back tothe late 1800s.
So this was our secondindustrial revolution.
It was about 1870 to 1914, thatperiod.
Some of the hallmarks of thatperiod were we were able to
finally manufacture machinetools.
We had this railroad movement.
The railroads were largelybuilt in the US, at least the
coast to coast commerce, by 1910.
(10:05):
And it was when we started tosee this business trust activity
.
And so business trusts areimportant to understand, because
when you had this industrialrevolution, you then had a
concentration of businessactivity and control and
domination of that businessactivity in the hands of very
few, and they tended to be inthe commerce centers.
Business activity in the handsof very few and they tended to
(10:26):
be in the commerce centers.
And so we were in a period thislate 1800s, early 1900s, the
situation and I'll get to agco-ops the situation that rural
areas found themselves in is onewhere a lot of the commerce was
dominated by and was thoughtabout for the cities, and so
think of big trusts likeStandard Oil and US Steel,
international Harvester in 1902,even Northern Securities
(10:47):
Company controlled most of therailroads in the US, and so the
problem that presented.
We saw that problem and it waseventually overcome through the
Rural Electrification Act.
But the problem we saw is thatinvestor-owned organizations
were making decisions that weregood for the investors and they
worked well for cities, but theydidn't work well for rural
(11:08):
areas.
And specifically thinking aboutfarmers, farmers were in a
situation where imagine haulingyour cart of corn that you
harvested to the elevator or therailroad the nearest railroad
to be able to access markets andget it out of the area to where
it needed to be, the nearestrailroad to be able to access
markets and get it out of thearea to where it needed to be
and you show up with an openwagon pulled by a two horse, and
(11:30):
it's an open.
You know it's not a cab, you'renot sitting in and it's it's
winter and you've come to therailroad to sell your grain, and
maybe the going price for abushel of corn is 25 cents, and
the railroad operator, who hasan agreement with the, with the
monopoly or with whoever ownsthe railroad, says well, I'll
give you 20 cents.
And as a farmer, what are yougoing to do?
(11:51):
You don't really have any power.
You either sell it for theprice they're offering or you
take it back to your farm whereyou don't have the use for it.
And so farmers, that played outover and over and over, whether
it was getting access tosupplies they needed on the farm
or was getting their productoff the farm they realized that
they had no power.
They had no say in DC, they hadno market power and really no
(12:12):
control over their own destinybecause of this burgeoning, this
big difference between themarket power of the collective
business activity and theindividual market power of
producers.
And so that's where we begin tosee, you know, organizations
that this group, listening,might recognize as, like the
(12:33):
grains, used to be called thepatrons of husbandry.
This was a social group offarmers started in 1967 to
figure out how they were goingto promote the social and
economic needs of farmers inrural area.
And then you know even centralIowa, for example.
There I think the oh it'scalled, it's the Marcus elevator
(12:54):
.
It's now it's now, I believe,an ag state location.
Ag state was formed with amerger of Alceco and first
cooperative association.
Marcus Iowa was one of theoldest operating grain elevators
in the country and still hasthat.
It's still operating on acooperative basis.
So farmers all over were tryingto figure out how are we going
(13:15):
to do this collectively to haveour own market power?
And so we see that happening inthe late 1800s and early 1900s,
that story rolling out over andover.
And I think it's reallyinteresting that by 1910, kind
of the end of the IndustrialRevolution we only had about
3,000 agricultural cooperativesacross the country then and by
(13:36):
1930, we had 12,000.
So it was a model that farmersrealized that if we're going to
do this, if we're going to havea say in our market, in the
markets, we've got to figure outa way to do this collectively,
because individually we don'thave the market power to do that
.
So skipped around a little bit.
But there's a really importanthistory there and I think that
(13:57):
helps us translate to today, toyour question about collective
bargaining power and the history.
The history is exactly that Ouragricultural cooperatives were
formed because they needed theability to have more market
power and more say in theirmarkets, and that's not to say
dominant market power.
(14:18):
But they needed a level footingon which to trade, on which to
agree on terms of trade and makesure that they were getting
fair prices, both what they'repaying for inputs and for their
outputs.
And I think that still existstoday.
Jim Lenz, GEAPS (14:31):
Yeah, I was just about to bring that.
That's a great historicalperspective that you started
with and, as you said, stilleffective today.
I was going to ask how areagricultural cooperatives
crucial?
I believe markets are.
In most cases, markets work.
Dr. Keri Jacobs (14:58):
There's a wisdom and a power for markets
to adjust, and I believe inmarkets.
I also believe that thehealthiest supply chains have a
diversity of ownership models,and so I'm someone who's
dedicating my professionalcareer and professional life to
agricultural cooperatives.
That's not to vilify privatelyowned, it's not to vilify
(15:19):
publicly traded.
I think our best supply chainshave diversity of ownership in
them, and co-ops has a place,and cooperatives have a place
for that as well.
The reason I think cooperativesare crucial to this modern, to
our modern supply chain isbecause, when you look at the
investments that are needed, thecapital structure that's needed
(15:41):
, these cooperatives are able tomake investments on behalf of
producers.
I mean, the cooperatives areowned by the producers and it
makes sure that there's analignment of interest there that
you don't necessarily have whenyou have a publicly traded or a
closely privately held maybefamily organization, a supply
chain.
(16:01):
Rightly so.
Their interests are differentthan a farmer's interest might
be, and so, for me, I thinkhaving farmer's interests
represented by an organizationthat's directed by them, owned
by them and who, fundamentally,will funnel benefits back to
them, make sure that we havethat representation of interest
(16:23):
and alignment of interest allthe way through the supply chain
.
Jim Lenz, GEAPS (16:26):
Representing the producers, representing the
farmers, yeah, so important.
Now let's turn to some examplesof what you believe is and how
cooperatives help rural andlocal communities today.
Dr. Keri Jacobs (16:38):
Yeah, there's a number of examples and some of
these are very easy to see, andmaybe maybe it's because I spent
a lot of time looking at thisand in this world but I think
the one that's easiest to see isthese agricultural cooperatives
.
It's no surprise to anyone thatthey operate assets probably,
if I could say, if I'll behonest with this, perhaps even a
(16:59):
redundancy of assets in localcommunities and the reason they
do that is they make decisionsabout assets not necessarily
with a profit maximizationmindset.
Now, that is controversial tosay that, but here's what I mean
by that as an economist profitmaximization is a very clear,
very defined area where you'remaximizing the firm's profits.
(17:20):
Marginal cost equals marginalrevenue.
Cooperatives have to beprofitable.
They do, but I see over andover that they make decisions
that perhaps a publicly tradedcompany would not make.
A privately held familycorporation would not make this
decision, because there's adifferent way to profitability
for them.
But agricultural cooperativeshad that mindset.
(17:43):
Yeah, we have to be profitablebecause we need to be able to
grow and invest, but we alsohave to make sure we're doing
what the farmer needs.
And so we have, for example,redundancy of assets.
I'll use that term and perhapsthere'll be pushback on that,
but it's why we have grainelevators still every 10 miles
or 12 miles In some cases.
We have quite a network.
That alone has a huge benefit.
(18:05):
It's employment in the localcommunities, it's driving tax
dollars back to the localcommunities with agricultural
cooperatives.
The profits that are earnedoftentimes are reinvested back
in these local communities,whether through philanthropic
giving Many of the agriculturalcooperatives have foundations or
annual giving to firedepartments and police
(18:25):
departments and schools andsports programs.
So it's important that theprofits, that the revenue, is
generated in local communitiesand it stays in those local
communities.
So that's one way in whichthere's really a benefit to
agricultural cooperatives thatyou don't necessarily see play
out in parallel for otherorganizational types Also and I
(18:47):
think this is anunderappreciated one, one we
don't think about enough butagricultural cooperatives are
governed by and controlled bytheir farmers and there's a real
opportunity here for leadership, building and fostering
leadership in local communitiesthrough these boards and through
these cooperative governance.
(19:07):
And so you know if you're abeginning or young farmer
listening and I won't defineyoung because that age is wide.
Listening and I won't defineyoung because that age is wide
but there is a real opportunityto have a leadership role in an
agricultural cooperative,serving on the board of
directors or maybe it's adelegate body, and I think that
benefits our communities when wehave that kind of leadership
(19:28):
coming directly from our ruralcommunities.
So there's a number of ways andI probably haven't listed them
all and I hope I haven'tforgotten the biggest ones, but
that this idea of ruralcommunities are better off with
cooperatives in them.
There's just a lot of benefitthere.
Jim Lenz, GEAPS (19:46):
Great clarity in your message.
Thank you for expressing thatyou spend a lot of time with
cooperatives, oftentimes withthe board of cooperatives, right
and so you have a real strongbeat on what's going on,
successes and challenges theyhave.
And I don't know if you'rewilling, but would you be able,
(20:06):
just broadly speaking, what doyou believe are the current
challenges faced by agriculturalcooperatives in today's
economic and agriculturallandscape?
Dr. Keri Jacobs (20:15):
agricultural cooperatives in today's economic
and agricultural landscape.
Sure, and I'll speak, you'reright, my lens.
Increasingly, I don't often getinvolved In fact I try very
hard not to and it's easybecause I don't have the
expertise but get involved inthe operational side.
So I really do try and stay onthe governance and strategy side
of agricultural cooperatives.
And cooperatives areagribusinesses and no different
than any other agribusiness,except in their structure.
(20:37):
And so, in addition to all thechallenges that agribusiness
today faces and the decisionsand how fast change is happening
, they face that there arecertainly size and scale
realities that challengeagricultural cooperatives
differently thannon-cooperatives and what I mean
by that is publicly tradedcompanies or privately held
differently than a cooperative.
(20:58):
In order to invest in today'sinfrastructure, whether it be AI
, whether it be technology,whether it be employees or
rising costs of insurance, othercompanies, non-cooperatives can
go out and they can get accessto capital investor capital,
right they can raise money, theycan bring in into their
ownership structure investmentcapital.
Cooperatives are not able to dothat in most cases.
(21:20):
Now there's state by statestatutes that do blend, like
this hybrid investor model, withthe cooperative model.
It's constrained, though,there's limitations on that, and
so when you think about theincredible changes that are
happening, the investments thatare needed, the cost of
regulation that are happening,the investments that are needed,
the cost of regulation, thecost of doing business and just
(21:40):
the cost of reinvesting in thebusiness.
Cooperatives are challengeduniquely because their capital
has to come from their members,and I'll pause there.
It's easy to say, but if youreally think about it, if you
think about the balance sheet ofan agricultural cooperative and
you're looking at that equitysection, how are we going to
grow the equity?
We can only really grow theequity two ways.
We can't invite investorcapital in.
We can only grow it if we haveprofitability to put on the.
(22:03):
You know profitability tomaintain in the business.
But we know that our membersexpect some of that
profitability to be shared withthem.
It's part of the cooperativemodel the sharing of profits
through patronage.
Or we can go to our members andask for a special capital raise
or debt Debt's always on there.
But there is this sense thatco-ops may move slower and are
(22:26):
more challenged when it comes toaccessing capital because it
has to come from within.
And then you layer that on topof.
Chs is the largest agriculturalcooperative in the country.
You layer that on top of CHS isthe largest agricultural
cooperative in the country, Ithink recently revenue it's
fluctuating anywhere from like42 to 47 billion, depending on
where commodity prices are.
That's the largest ag co-op inthe country and they have a
national.
(22:46):
They have a worldwide footprint.
Adm their competitor is morethan twice their size in annual
revenue.
Coke Industries is 125 billionin annual revenue.
So when you think about eventhe largest agricultural
cooperative is dwarfed in sizeby many of its main competitors
in its marketplace.
That highlights anotherchallenge for co-ops, just when
(23:09):
you layer that on top of howthey're able, you know their
constraints in investingsometimes and access to capital.
So it's this capitalintensivity that that creates a
lot of challenges and and thereare challenges that are unique
to cooperatives.
I would also add from you knowthese are member organizations.
So if I could, the other thingI would pivot to is you know
(23:30):
co-ops are member organizationsand the reality is they do make
decisions differently andbecause of that, because they're
member organizations, I thinkthey're held to a different
standard by farmers and ranchersthan non-cooperatives.
And it's interesting to hearfarmers and ranchers talk about
those who have a co-op in theirmarketplace and a
non-cooperative, theexpectations they have of the
(23:50):
co-op versus the non-co-op, notin pricing, but just what they
expect in terms of relationshipand value proposition.
So there is a challenge totoday, to being a member
organization and having thatresponsibility that a publicly
traded company just doesn't evenneed to worry about and their
customers don't ask them toworry about that.
So there's a lot baked intothis model that is both.
(24:13):
It's a secret sauce, for sure,this alignment with producers,
but it can be an Achilles heelas well.
Jim Lenz, GEAPS (24:22):
Wow, great, great expression, great thoughts
.
Let's turn to those arechallenges.
So let's turn to opportunitiesfor agricultural cooperatives.
What are those opportunitiesfor growth and innovation in the
cooperative model?
What are those opportunitiesfor growth and innovation in the
cooperative?
Dr. Keri Jacobs (24:36):
model.
Yeah, I'll go back to what Isaid is that you know, the
opportunities, I would say arethe same as any other
agribusiness and there arecertainly a lot, I think, about
what's special and perhapsunique about that opportunity.
So let's take, for example,sustainability practices or
climate smart practices, carbonmarkets, the ability to use data
(24:56):
, so that opportunity exists foragricultural cooperatives and
they're trying to get theirhands around that, just like
their competitors are, as wellas downstream trading partners.
So when you think about asupply chain, let's say, the
farmers are the most upstreamthey're not because there's
input suppliers ahead of themthat are also co-ops in some
case, because there's inputsuppliers ahead of them that are
also co-ops in some case.
(25:21):
But all the way down that valuechain data and what we get from
data, the value that can beextracted from that I think
there's a huge opportunity herefor producers and their co-ops
to get their arms around thatand make sure that the
monetization of the value ofdata or the value of the
practices the farmers areimplementing, co-ops have an
opportunity to make sure thatthat value stays either at the
co-op or at the farm level andisn't exported and extracted
(25:45):
further down the supply chainand where others can capitalize
and leverage that value.
So I think there's an importantrole for co-ops to play here.
They're closest to the farmer,they're owned and controlled by
a farmer board.
They have a natural trust thereor should I hope between the
cooperative organization and thefarmers, different than a
non-cooperative would have allelse equal, and so I think
(26:07):
there's a lot of opportunitythere, just in how co-ops are
positioned in terms of bringingand making sure value stays at
the farm gate from, like I said,the conservation practices that
are being put into place,sustainability practices, even
data and AI, and how that'sgoing to drive decision-making
on the farms.
Jim Lenz, GEAPS (26:25):
So you expressed your opportunities for
growth and innovation in thiscooperative model just now.
Let's now focus on leadershipopportunities and talent
development within cooperativelandscape.
Can you provide some details towhat you see as opportunities
in this space?
Dr. Keri Jacobs (26:41):
Yeah, I'm glad you asked that question, thanks.
So when I talked about thechallenges, I talked about the
business challenges,capitalization challenges, and
the other side is the memberchallenge and being a member
organization, and I also saidthat that can be a secret sauce,
a really great advantage thatcooperatives have, and that's
what I would.
So the flip side of the coin isit's a real opportunity and
(27:03):
I'll share with something thatI've been sharing more.
I've been sharing this morebecause I think it's
particularly relevant now.
When I was learning aboutagricultural cooperatives and
cooperative governance in myrole 2012 through 2015, when I
was first starting to work withthem, a director said something
that has stuck with me and hesaid my grandparents built the
(27:23):
co-op.
My parents' generation used thecooperative.
My generation will kill it andwhat he was talking about, there
is his generation, mygeneration out.
There is his generation, mygeneration, making decisions
differently and notunderstanding maybe not
(27:44):
understanding the long game thata cooperative brings, the long
perspective the cooperativebrings, that his grandparents
understood what happened whenyou didn't have an agricultural
cooperative in the market to bethat disciplining feature in the
marketplace, so to speak, andso, generations beyond the start
of our agricultural cooperative, we've slowly kind of lost that
understanding and my generation, I would say, is the same.
This is a generalization, Iunderstand, so there are cases
(28:06):
when this is not true, but Ithink overwhelmingly.
But what gives me a lot of hopeis this generation.
So, thinking about themillennials and Gen Z and I'm
not an expert in either of thosegenerations, but I've heard
experts speak recently in whatstands out to me and I see this
with the students that I workwith those generations are
incredibly much more so, I think, than my generation community
(28:28):
oriented.
They have much better politicalawareness and want to be
involved and I'm not talkingjust politics, I'm saying just
like an awareness of the stateof things and wanting to get
involved.
They are connected and and theyvalue connections.
And so I think, as anagribusiness, cooperatives have
(28:48):
a huge foot to put forward andand a benefit to offer this
generation who wants to makedecisions that align with their
own values.
So we need, for example, laboris a challenge in all
agribusinesses and historicallyagricultural cooperatives I
would say probably relied onquote-unquote farm kids who
understood agriculture to beemployees, and increasingly
(29:11):
we're hiring employees who don'tcome from agriculture, didn't
grow up on a farm maybe, arevery far removed.
But they're coming toagriculture because in the
millennial and Gen Z generation,they want to make a difference.
They make decisions based onalignment of values.
They want to be a part ofsomething.
They want to know that they'remaking a difference, and so I
(29:32):
think cooperatives have a lot tooffer in terms of aligning with
those generations, whether theybe as members or they be as
employees.
So I see us kind of gaining someground again in terms of the
attractiveness of doing businesswith and also working for
agricultural cooperatives.
Is that value alignment andjust how this generation is
(29:53):
making decisions differently.
I'll be honest, my generation,the only thing I cared about
coming out of school, was howmuch are you paying me?
I took a job based on pay aloneand I don't see this generation
doing that.
I see them asking questionsabout what's your culture,
what's your value?
How do you, you know?
Are you a certified B Corp?
They care about things likethat.
Jim Lenz, GEAPS (30:15):
Wow, what a great overview about
cooperatives and their role inour communities.
They play such a big impact.
What are some general closingstatements you want to say
before we conclude here today?
Dr. Keri Jacobs (30:29):
Yeah, you know this is going to sound corny,
but I like to say this because Ithink it's a good framing for
what the cooperative model is.
I say you know, we knowcooperatives are an extension of
(30:51):
their members farms, farmersand ranchers.
But what I mean by that is itallows producers to benefit from
the supply chains in which theyare intricately involved.
That money is not beingexported out of communities,
it's not going to Wall Street,the proverbial Wall Street, and
so you know, I think it's reallyimportant that we recognize
(31:13):
that.
That's the value of the modelis it keeps those investments
local.
If we look back and putourselves in the shoes of the
founding farmers and ranchersmore than 100 years ago we have
23% of our agriculturalcooperatives are more than 100
years old we do realize howpowerful and yet fragile this
model can be.
So success and failure, Ibelieve, ultimately reflects the
(31:35):
membership's appetite, farmers'and ranchers' appetite for
collective action, and I seethat on the upswing today and
I'm really encouraged by that.
Jim Lenz, GEAPS (31:45):
Dr Kerry Jacobs .
I don't know if I could havehad a person on here talk so
eloquently and inform theaudience so much about the role
of cooperatives in agriculturalcommunities, and so that's why
it's so special.
People may want to learn moreabout this and about you and
about your organization and thepeople you work with.
You mentioned earlier you havea podcast.
Please mention that, how tofind it, what it's about, and
(32:08):
any other resources so that wecan direct those listeners to
where you want them to go.
Sure, yeah.
Dr. Keri Jacobs (32:15):
Thanks for that opportunity.
So I'm on LinkedIn and thecenter that I run at the
University of Missouri is theGraduate Institute of
Cooperative Leadership.
Gicl is the acronym.
It's kind of a funny acronym.
That's also on LinkedIn.
The podcast is accessible.
We promote it on LinkedIn.
It's on Apple Podcasts andSpotify.
It is accessible on a website,buildbetterboardscom so that is
(32:43):
the name of the podcast BuildBetter Boards and it's co-hosted
by me and my good friendRichard Fagerland of Peak
Solutions.
So appreciate that opportunityto mention those things.
And we also have a website.
It's.
If you search for GraduateInstitute of Cooperative
Leadership at the University ofMissouri, you can find it.
Jim Lenz, GEAPS (32:55):
Great, and people want some consulting
services or want you to speak.
Is that something you do?
Dr. Keri Jacobs (33:01):
Yeah, we call it outreach at the university
extension and outreach.
Jim Lenz, GEAPS (33:05):
All right.
Dr. Keri Jacobs (33:06):
Yeah, happy to.
Jim Lenz, GEAPS (33:08):
Use those resources you just shared to get
ahold of you and yourorganization.
Super Well, we will make surethat is in the show notes for
each episode.
Uh, and links are there, and ithas been nothing but a delight.
Thank you for spending timewith the GEAPS Whole Grain
podcast listeners thank you,joan, appreciate it that wraps
up this episode of the wholegrain podcast.
(33:29):
A big thank Dr.
Keri Jacobs for sharing herexpertise on the role of
cooperatives in strengtheningthe global food and supply
chains.
Her insights on cooperativegovernance, empowering farmers
and driving innovation offervaluable perspectives for anyone
in the grain industry.
As we've heard today,cooperatives continue to be a
powerful force in supportingfarmers, enhancing food security
and fostering sustainability.
(33:50):
Stay informed and engaged withthe evolving role of
cooperatives is key.
If you want to learn more, besure to explore the work being
done at the Graduate Instituteof Cooperative Leadership at the
University of Missouri.
We'll provide details in theshow notes.
Thanks for tuning in.
If you found this episodevaluable, share it with your
colleagues, subscribe to thepodcast and let us know your
thoughts.
Again, the fan mail is nowavailable.
(34:11):
You can also send me a messagejames@geaps.
com.
We may even feature yourcomments in the show.
Whole Grain is easy to connectwith.
You can go to the GEAPS websiteat www.
geaps.
com/ whole grain.
Find this also on your favoritepodcast apps, such as Apple
Podcasts, Spotify, Amazon Music,Youtube Music, overcast,
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(34:31):
Just do a search for WholeGrain, hit the subscribe button
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Plus, you can catch up on allthe past episodes.
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If you or your organizationwould like to sponsor an episode
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(34:54):
please reach out to me.
Jim Lenz, director of globaleducation and training at GEAPS.
james@geaps.
com.
We'd love to connect with you.
Until next time, keep learning,keep innovating and keep moving
the industry forward.
Have a great day and thanks forlistening to whole grain.
The landscape of agriculture is transforming
and cooperatives are at theheart of ensuring a sustainable
and resilient future for foodand fuel systems around the
globe.
But how do these cooperativesempower farmers, strengthen
communities and drive innovationin the supply chain?
Our guest today brings a wealthof expertise and perspective to
help us explore these criticalquestions.
(00:23):
Get ready for an insightful andthought-provoking conversation.
Let's dive in.
Hello and welcome to the show.
Welcome to the Whole GrainPodcast.
My name is Jim Lenz, your hostand producer of the show and the
director of global educationand training at GEAPS.
We're the mission of the GrainElevator and Processing Society
to champion, connect and servethe global grain industry and
(00:43):
our members At GEAPS.
We work to be the globalcommunity and thought leader for
the grain industry, which feedsand fuels the world.
Thanks for joining us today andfor being part of the network
of thousands of grain handlingand grain processing
professionals across the globetaking strategic steps to grow
professionally.
The Whole Grain Show will giveyou the competitive advantage to
win at work so you can makemore of an impact.
(01:04):
Thank you for continuing toshare the news of the Whole
Grain Podcast as an easy toaccess and easy to share
resource for learning on the go.
Your influence has helpedsupport listeners and grain
professionals like you from 86countries in just a couple years
of production.
You can continue to share theWhole Grain episode with your
colleagues.
Whole Grain is easy to access.
We offer two easy ways toconnect with the show.
(01:25):
You can do that by going to theJeeps website at jeepscom,
slash whole grain.
You can also find us in yourfavorite podcast app, such as
Apple Podcasts, Spotify, AmazonMusic, Youtube Music, Pandora
and wherever else you find yourpodcasts.
Just do a search for WholeGrain, hit subscribe and you'll
be all set to get the latestepisodes as soon as they're
released.
Plus, you can catch up on allpast episodes.
(01:47):
You now have access to the fanmail link or you can send me a
message or james@geaps.
That's , we may even featureyour comments on the show.
Our special guest in today'sepisode is Dr Keri Jacobs.
Dr.
Jacobs is an AssociateProfessor of Agricultural and
Applied Economics at theUniversity of Missouri.
(02:08):
Her expertise and passion forempowering cooperatives make her
the perfect guest to discussthe critical role of
cooperatives in global food andfuel systems.
In today's episode, we'llexplore the historical
significance and modern-dayimportance of agricultural
cooperatives, how cooperativesempower farmers and communities.
We'll also examine thechallenges and opportunities for
cooperatives in today'sevolving landscape.
(02:29):
Get ready for an engaging andinsightful conversation that
highlights the power ofcollective action in agriculture
.
Let's dive into theconversation.
(02:50):
All right, we have Dr.
Carrie L Jacobs.
She is Associate Professor ofAgriculture and Applied
Economics at the University ofMissouri and holds the Partridge
Chair in Cooperative Leadership.
In 2021, she was named theExecutive Director of the
Graduate Institute ofCooperative Leadership.
In her outreach role, Jacob'spartners with cooperatives and
their associations to create anddeliver director and talent
(03:12):
development programs incooperative governance and
finance, and to engage withcooperative boards and
leadership in strategic planningand through collaboration with
industry and key stakeholders,she pursues research that seeks
to inform and elevate producers'opportunities through
collective action within theirsupply chains.
Jacobs was raised on herfamily's hog and row crop farm
in eastern Iowa.
(03:32):
She earned her BA in economicsfrom Cole College and her PhD in
agriculture economics fromNorth Carolina State University.
That's why we are so excited tobring Dr.
Keri Jacobs here to the show.
Thank you very much, carrie,for joining us.
Dr. Keri Jacobs (03:47):
Thanks, Jim, I appreciate you having me.
Jim Lenz, GEAPS (03:49):
Well, it is great to have you because you
bring in a fresh new perspective, a topic that we have not done
today.
It's about cooperatives.
We're going to dig in thatdeeply.
But to start the show with abit of positive spirit, I
sometimes ask guests in theWhole Grain show if they have a
mantra or success quote thatthey live by professionally,
sometimes personally as well.
Dr. Keri Jacobs (04:08):
Yeah, that's an interesting question, and so
I'll share something.
I don't know.
I can see how it applies to mypersonal life at times as well,
or maybe in families, and I'mstealing this, by the way, I
have a gentleman I work closelywith.
His name is Richard Fagerlund.
We have a podcast together andhe's really you know, he's a,
he's a talent leadership guy,he's a strategy guy, and
(04:33):
increasingly in the work thatwe're doing, I realized how much
this resonates.
And it's this he says cultureis the sum of what you permit
and what you promote.
And so in board work that I doand that we do, you know, one of
the things we're really focusedon is the culture boards of
directors of agriculturalcooperatives, but others create
inside the boardroom, and so forme, that really resonates as as
just an important thing to keepin mind is that when you're
(04:55):
building culture and we allunderstand the one that
dovetails with this, jim, issomething that another friend of
mine says, and it's you knowshe turned me on to, but it is
that culture eats strategy forbreakfast, and so there's a lot
running around the culture realmor in the culture realm that I
think is so important to keep inmind in the work that I do
anyway.
Jim Lenz, GEAPS (05:15):
Thank you very much for sharing that.
So, carrie, many of thelisteners today have heard of
cooperatives.
Not all grain facilities arecooperatives, but many listeners
are associated withcooperatives in one form or
another.
Maybe a cooperative is theiremployer or again, they're
associated with that in thegrain industry in one way or
another.
To provide a big understanding,what is a cooperative?
(05:37):
Why are they important?
What's the history of them?
I think that'd be a good way tostart the show today.
Dr. Keri Jacobs (05:44):
Sure, so, at the very highest level, a
cooperative is an organizationthat is member owned, member
controlled and member benefiting.
So those three dimensions andyou can substitute the word user
owned or member owned, butspecific in this model has has
been applied in the?
U and worldwide to all sorts ofindustries, from the home
(06:05):
healthcare to house cleaning, totutoring, to rideshare, to
agriculture, financial, likecredit unions.
It's a model that has a lot offlexibility and I think today
we're going to speak primarilyabout agriculture and so,
therefore, agriculturalcooperatives and that's really
where my focus is and specialtyis how that applies to
agriculture is what that meansis these cooperatives are owned
(06:29):
by the members, the farmers thatuse them, so there's an
ownership piece there as anequity, and we can talk more
about that.
It means they're capitalized bythem, it means they're
controlled by farmers, sofarmers serve in the boardroom,
farmers are directors, they'reelected from the membership of
farmers who are members.
However, membership is definedand the purpose of to
(06:50):
agricultural cooperatives, whatthat means is control and
ownership and the purpose.
The organization is alignedaround its farmer members,
(07:11):
farmers and ranchers.
Jim Lenz, GEAPS (07:12):
That's a great introduction to this.
Thank you for sharing, Carrie.
Now you have a very special,unique background.
You certainly started in theagriculture area.
Kind of tell us a little bitabout your history and kind of
the work you're doing today.
Dr. Keri Jacobs (07:27):
Sure, you said this in the introduction.
I grew up on a family farm ineastern Iowa and my family did
business with the co-op in thatpart of the state.
It was Swiss Valley for a whileand now it's Innovative Ag
Services.
So as a farm kid I thought Iknew what a cooperative was.
I had kind of a unique path toacademia, kind of went and got
(07:48):
my graduate degree late and myfirst job out of grad school was
at Iowa State University.
Between my undergrad andgraduate work I was not in the
ag field and it was.
I guess you can take the kidoff the farm but you can't take
the farm out of the kid.
And I really wanted to get backto agriculture and that's why I
chose to do my doctorate work,an emphasis in agricultural
(08:10):
economics.
And when I started Iowa Stategrad school it was in a research
and teaching role related toagribusiness and so I was
getting to have that connectionto agriculture but really moving
into a role when I was at IowaState and now at the University
of Missouri where my job isreally focused, I have an
outreach and extension rolerelated to agricultural
(08:32):
cooperatives specifically andthe reason I love that is it
feels like every day in my job.
I get to work with farmers,usually as directors of
agricultural cooperatives, butit feels like I'm working with
my parents or my grandparents.
It's just a very comfortablething to do.
So it's how you know.
I think my eight-year-old selfwould have thought maybe I would
have been a farmer.
(08:52):
That's what I wanted to be, butthat wasn't in the cards for me
.
But what I get to do is I getto be in a role where I feel
like I can support farmersthrough their collective action
through agriculturalcooperatives.
It resonates with my upbringingand my value system and it's a
big honor to be able to do this.
Jim Lenz, GEAPS (09:09):
And you're driving big impact by the work
you're doing and the folks thatyou associate with.
That's terrific.
I hope so.
I hope so.
Now, how do cooperativesempower farmers and enhance
their collective bargainingpower?
Dr. Keri Jacobs (09:23):
That's a great question and it's one that is
relevant today, but it's beenrelevant for a hundred years.
So, if you'll allow me, I'mgoing to go back a little bit of
a history lesson, because Ifind this fascinating.
It's part of what, when I dooutreach to cooperative
employees, I want them tounderstand the foundations of
the agricultural cooperativeshere in the US and, I think, to
really understand why we havethem and the value they provide.
(09:44):
You really got to go back tothe late 1800s.
So this was our secondindustrial revolution.
It was about 1870 to 1914, thatperiod.
Some of the hallmarks of thatperiod were we were able to
finally manufacture machinetools.
We had this railroad movement.
The railroads were largelybuilt in the US, at least the
coast to coast commerce, by 1910.
(10:05):
And it was when we started tosee this business trust activity
.
And so business trusts areimportant to understand, because
when you had this industrialrevolution, you then had a
concentration of businessactivity and control and
domination of that businessactivity in the hands of very
few, and they tended to be inthe commerce centers.
Business activity in the handsof very few and they tended to
(10:26):
be in the commerce centers.
And so we were in a period thislate 1800s, early 1900s, the
situation and I'll get to agco-ops the situation that rural
areas found themselves in is onewhere a lot of the commerce was
dominated by and was thoughtabout for the cities, and so
think of big trusts likeStandard Oil and US Steel,
international Harvester in 1902,even Northern Securities
(10:47):
Company controlled most of therailroads in the US, and so the
problem that presented.
We saw that problem and it waseventually overcome through the
Rural Electrification Act.
But the problem we saw is thatinvestor-owned organizations
were making decisions that weregood for the investors and they
worked well for cities, but theydidn't work well for rural
(11:08):
areas.
And specifically thinking aboutfarmers, farmers were in a
situation where imagine haulingyour cart of corn that you
harvested to the elevator or therailroad the nearest railroad
to be able to access markets andget it out of the area to where
it needed to be, the nearestrailroad to be able to access
markets and get it out of thearea to where it needed to be
and you show up with an openwagon pulled by a two horse, and
(11:30):
it's an open.
You know it's not a cab, you'renot sitting in and it's it's
winter and you've come to therailroad to sell your grain, and
maybe the going price for abushel of corn is 25 cents, and
the railroad operator, who hasan agreement with the, with the
monopoly or with whoever ownsthe railroad, says well, I'll
give you 20 cents.
And as a farmer, what are yougoing to do?
(11:51):
You don't really have any power.
You either sell it for theprice they're offering or you
take it back to your farm whereyou don't have the use for it.
And so farmers, that played outover and over and over, whether
it was getting access tosupplies they needed on the farm
or was getting their productoff the farm they realized that
they had no power.
They had no say in DC, they hadno market power and really no
(12:12):
control over their own destinybecause of this burgeoning, this
big difference between themarket power of the collective
business activity and theindividual market power of
producers.
And so that's where we begin tosee, you know, organizations
that this group, listening,might recognize as, like the
(12:33):
grains, used to be called thepatrons of husbandry.
This was a social group offarmers started in 1967 to
figure out how they were goingto promote the social and
economic needs of farmers inrural area.
And then you know even centralIowa, for example.
There I think the oh it'scalled, it's the Marcus elevator
(12:54):
.
It's now it's now, I believe,an ag state location.
Ag state was formed with amerger of Alceco and first
cooperative association.
Marcus Iowa was one of theoldest operating grain elevators
in the country and still hasthat.
It's still operating on acooperative basis.
So farmers all over were tryingto figure out how are we going
(13:15):
to do this collectively to haveour own market power?
And so we see that happening inthe late 1800s and early 1900s,
that story rolling out over andover.
And I think it's reallyinteresting that by 1910, kind
of the end of the IndustrialRevolution we only had about
3,000 agricultural cooperativesacross the country then and by
(13:36):
1930, we had 12,000.
So it was a model that farmersrealized that if we're going to
do this, if we're going to havea say in our market, in the
markets, we've got to figure outa way to do this collectively,
because individually we don'thave the market power to do that
.
So skipped around a little bit.
But there's a really importanthistory there and I think that
(13:57):
helps us translate to today, toyour question about collective
bargaining power and the history.
The history is exactly that Ouragricultural cooperatives were
formed because they needed theability to have more market
power and more say in theirmarkets, and that's not to say
dominant market power.
(14:18):
But they needed a level footingon which to trade, on which to
agree on terms of trade and makesure that they were getting
fair prices, both what they'repaying for inputs and for their
outputs.
And I think that still existstoday.
Jim Lenz, GEAPS (14:31):
Yeah, I was just about to bring that.
That's a great historicalperspective that you started
with and, as you said, stilleffective today.
I was going to ask how areagricultural cooperatives
crucial?
I believe markets are.
In most cases, markets work.
Dr. Keri Jacobs (14:58):
There's a wisdom and a power for markets
to adjust, and I believe inmarkets.
I also believe that thehealthiest supply chains have a
diversity of ownership models,and so I'm someone who's
dedicating my professionalcareer and professional life to
agricultural cooperatives.
That's not to vilify privatelyowned, it's not to vilify
(15:19):
publicly traded.
I think our best supply chainshave diversity of ownership in
them, and co-ops has a place,and cooperatives have a place
for that as well.
The reason I think cooperativesare crucial to this modern, to
our modern supply chain isbecause, when you look at the
investments that are needed, thecapital structure that's needed
(15:41):
, these cooperatives are able tomake investments on behalf of
producers.
I mean, the cooperatives areowned by the producers and it
makes sure that there's analignment of interest there that
you don't necessarily have whenyou have a publicly traded or a
closely privately held maybefamily organization, a supply
chain.
(16:01):
Rightly so.
Their interests are differentthan a farmer's interest might
be, and so, for me, I thinkhaving farmer's interests
represented by an organizationthat's directed by them, owned
by them and who, fundamentally,will funnel benefits back to
them, make sure that we havethat representation of interest
(16:23):
and alignment of interest allthe way through the supply chain
.
Jim Lenz, GEAPS (16:26):
Representing the producers, representing the
farmers, yeah, so important.
Now let's turn to some examplesof what you believe is and how
cooperatives help rural andlocal communities today.
Dr. Keri Jacobs (16:38):
Yeah, there's a number of examples and some of
these are very easy to see, andmaybe maybe it's because I spent
a lot of time looking at thisand in this world but I think
the one that's easiest to see isthese agricultural cooperatives
.
It's no surprise to anyone thatthey operate assets probably,
if I could say, if I'll behonest with this, perhaps even a
(16:59):
redundancy of assets in localcommunities and the reason they
do that is they make decisionsabout assets not necessarily
with a profit maximizationmindset.
Now, that is controversial tosay that, but here's what I mean
by that as an economist profitmaximization is a very clear,
very defined area where you'remaximizing the firm's profits.
(17:20):
Marginal cost equals marginalrevenue.
Cooperatives have to beprofitable.
They do, but I see over andover that they make decisions
that perhaps a publicly tradedcompany would not make.
A privately held familycorporation would not make this
decision, because there's adifferent way to profitability
for them.
But agricultural cooperativeshad that mindset.
(17:43):
Yeah, we have to be profitablebecause we need to be able to
grow and invest, but we alsohave to make sure we're doing
what the farmer needs.
And so we have, for example,redundancy of assets.
I'll use that term and perhapsthere'll be pushback on that,
but it's why we have grainelevators still every 10 miles
or 12 miles In some cases.
We have quite a network.
That alone has a huge benefit.
(18:05):
It's employment in the localcommunities, it's driving tax
dollars back to the localcommunities with agricultural
cooperatives.
The profits that are earnedoftentimes are reinvested back
in these local communities,whether through philanthropic
giving Many of the agriculturalcooperatives have foundations or
annual giving to firedepartments and police
(18:25):
departments and schools andsports programs.
So it's important that theprofits, that the revenue, is
generated in local communitiesand it stays in those local
communities.
So that's one way in whichthere's really a benefit to
agricultural cooperatives thatyou don't necessarily see play
out in parallel for otherorganizational types Also and I
(18:47):
think this is anunderappreciated one, one we
don't think about enough butagricultural cooperatives are
governed by and controlled bytheir farmers and there's a real
opportunity here for leadership, building and fostering
leadership in local communitiesthrough these boards and through
these cooperative governance.
(19:07):
And so you know if you're abeginning or young farmer
listening and I won't defineyoung because that age is wide.
Listening and I won't defineyoung because that age is wide
but there is a real opportunityto have a leadership role in an
agricultural cooperative,serving on the board of
directors or maybe it's adelegate body, and I think that
benefits our communities when wehave that kind of leadership
(19:28):
coming directly from our ruralcommunities.
So there's a number of ways andI probably haven't listed them
all and I hope I haven'tforgotten the biggest ones, but
that this idea of ruralcommunities are better off with
cooperatives in them.
There's just a lot of benefitthere.
Jim Lenz, GEAPS (19:46):
Great clarity in your message.
Thank you for expressing thatyou spend a lot of time with
cooperatives, oftentimes withthe board of cooperatives, right
and so you have a real strongbeat on what's going on,
successes and challenges theyhave.
And I don't know if you'rewilling, but would you be able,
(20:06):
just broadly speaking, what doyou believe are the current
challenges faced by agriculturalcooperatives in today's
economic and agriculturallandscape?
Dr. Keri Jacobs (20:15):
agricultural cooperatives in today's economic
and agricultural landscape.
Sure, and I'll speak, you'reright, my lens.
Increasingly, I don't often getinvolved In fact I try very
hard not to and it's easybecause I don't have the
expertise but get involved inthe operational side.
So I really do try and stay onthe governance and strategy side
of agricultural cooperatives.
And cooperatives areagribusinesses and no different
than any other agribusiness,except in their structure.
(20:37):
And so, in addition to all thechallenges that agribusiness
today faces and the decisionsand how fast change is happening
, they face that there arecertainly size and scale
realities that challengeagricultural cooperatives
differently thannon-cooperatives and what I mean
by that is publicly tradedcompanies or privately held
differently than a cooperative.
(20:58):
In order to invest in today'sinfrastructure, whether it be AI
, whether it be technology,whether it be employees or
rising costs of insurance, othercompanies, non-cooperatives can
go out and they can get accessto capital investor capital,
right they can raise money, theycan bring in into their
ownership structure investmentcapital.
Cooperatives are not able to dothat in most cases.
(21:20):
Now there's state by statestatutes that do blend, like
this hybrid investor model, withthe cooperative model.
It's constrained, though,there's limitations on that, and
so when you think about theincredible changes that are
happening, the investments thatare needed, the cost of
regulation that are happening,the investments that are needed,
the cost of regulation, thecost of doing business and just
(21:40):
the cost of reinvesting in thebusiness.
Cooperatives are challengeduniquely because their capital
has to come from their members,and I'll pause there.
It's easy to say, but if youreally think about it, if you
think about the balance sheet ofan agricultural cooperative and
you're looking at that equitysection, how are we going to
grow the equity?
We can only really grow theequity two ways.
We can't invite investorcapital in.
We can only grow it if we haveprofitability to put on the.
(22:03):
You know profitability tomaintain in the business.
But we know that our membersexpect some of that
profitability to be shared withthem.
It's part of the cooperativemodel the sharing of profits
through patronage.
Or we can go to our members andask for a special capital raise
or debt Debt's always on there.
But there is this sense thatco-ops may move slower and are
(22:26):
more challenged when it comes toaccessing capital because it
has to come from within.
And then you layer that on topof.
Chs is the largest agriculturalcooperative in the country.
You layer that on top of CHS isthe largest agricultural
cooperative in the country, Ithink recently revenue it's
fluctuating anywhere from like42 to 47 billion, depending on
where commodity prices are.
That's the largest ag co-op inthe country and they have a
national.
(22:46):
They have a worldwide footprint.
Adm their competitor is morethan twice their size in annual
revenue.
Coke Industries is 125 billionin annual revenue.
So when you think about eventhe largest agricultural
cooperative is dwarfed in sizeby many of its main competitors
in its marketplace.
That highlights anotherchallenge for co-ops, just when
(23:09):
you layer that on top of howthey're able, you know their
constraints in investingsometimes and access to capital.
So it's this capitalintensivity that that creates a
lot of challenges and and thereare challenges that are unique
to cooperatives.
I would also add from you knowthese are member organizations.
So if I could, the other thingI would pivot to is you know
(23:30):
co-ops are member organizationsand the reality is they do make
decisions differently andbecause of that, because they're
member organizations, I thinkthey're held to a different
standard by farmers and ranchersthan non-cooperatives.
And it's interesting to hearfarmers and ranchers talk about
those who have a co-op in theirmarketplace and a
non-cooperative, theexpectations they have of the
(23:50):
co-op versus the non-co-op, notin pricing, but just what they
expect in terms of relationshipand value proposition.
So there is a challenge totoday, to being a member
organization and having thatresponsibility that a publicly
traded company just doesn't evenneed to worry about and their
customers don't ask them toworry about that.
So there's a lot baked intothis model that is both.
(24:13):
It's a secret sauce, for sure,this alignment with producers,
but it can be an Achilles heelas well.
Jim Lenz, GEAPS (24:22):
Wow, great, great expression, great thoughts
.
Let's turn to those arechallenges.
So let's turn to opportunitiesfor agricultural cooperatives.
What are those opportunitiesfor growth and innovation in the
cooperative model?
What are those opportunitiesfor growth and innovation in the
cooperative?
Dr. Keri Jacobs (24:36):
model.
Yeah, I'll go back to what Isaid is that you know, the
opportunities, I would say arethe same as any other
agribusiness and there arecertainly a lot, I think, about
what's special and perhapsunique about that opportunity.
So let's take, for example,sustainability practices or
climate smart practices, carbonmarkets, the ability to use data
(24:56):
, so that opportunity exists foragricultural cooperatives and
they're trying to get theirhands around that, just like
their competitors are, as wellas downstream trading partners.
So when you think about asupply chain, let's say, the
farmers are the most upstreamthey're not because there's
input suppliers ahead of themthat are also co-ops in some
case, because there's inputsuppliers ahead of them that are
also co-ops in some case.
(25:21):
But all the way down that valuechain data and what we get from
data, the value that can beextracted from that I think
there's a huge opportunity herefor producers and their co-ops
to get their arms around thatand make sure that the
monetization of the value ofdata or the value of the
practices the farmers areimplementing, co-ops have an
opportunity to make sure thatthat value stays either at the
co-op or at the farm level andisn't exported and extracted
(25:45):
further down the supply chainand where others can capitalize
and leverage that value.
So I think there's an importantrole for co-ops to play here.
They're closest to the farmer,they're owned and controlled by
a farmer board.
They have a natural trust thereor should I hope between the
cooperative organization and thefarmers, different than a
non-cooperative would have allelse equal, and so I think
(26:07):
there's a lot of opportunitythere, just in how co-ops are
positioned in terms of bringingand making sure value stays at
the farm gate from, like I said,the conservation practices that
are being put into place,sustainability practices, even
data and AI, and how that'sgoing to drive decision-making
on the farms.
Jim Lenz, GEAPS (26:25):
So you expressed your opportunities for
growth and innovation in thiscooperative model just now.
Let's now focus on leadershipopportunities and talent
development within cooperativelandscape.
Can you provide some details towhat you see as opportunities
in this space?
Dr. Keri Jacobs (26:41):
Yeah, I'm glad you asked that question, thanks.
So when I talked about thechallenges, I talked about the
business challenges,capitalization challenges, and
the other side is the memberchallenge and being a member
organization, and I also saidthat that can be a secret sauce,
a really great advantage thatcooperatives have, and that's
what I would.
So the flip side of the coin isit's a real opportunity and
(27:03):
I'll share with something thatI've been sharing more.
I've been sharing this morebecause I think it's
particularly relevant now.
When I was learning aboutagricultural cooperatives and
cooperative governance in myrole 2012 through 2015, when I
was first starting to work withthem, a director said something
that has stuck with me and hesaid my grandparents built the
(27:23):
co-op.
My parents' generation used thecooperative.
My generation will kill it andwhat he was talking about, there
is his generation, mygeneration out.
There is his generation, mygeneration, making decisions
differently and notunderstanding maybe not
(27:44):
understanding the long game thata cooperative brings, the long
perspective the cooperativebrings, that his grandparents
understood what happened whenyou didn't have an agricultural
cooperative in the market to bethat disciplining feature in the
marketplace, so to speak, andso, generations beyond the start
of our agricultural cooperative, we've slowly kind of lost that
understanding and my generation, I would say, is the same.
This is a generalization, Iunderstand, so there are cases
(28:06):
when this is not true, but Ithink overwhelmingly.
But what gives me a lot of hopeis this generation.
So, thinking about themillennials and Gen Z and I'm
not an expert in either of thosegenerations, but I've heard
experts speak recently in whatstands out to me and I see this
with the students that I workwith those generations are
incredibly much more so, I think, than my generation community
(28:28):
oriented.
They have much better politicalawareness and want to be
involved and I'm not talkingjust politics, I'm saying just
like an awareness of the stateof things and wanting to get
involved.
They are connected and and theyvalue connections.
And so I think, as anagribusiness, cooperatives have
(28:48):
a huge foot to put forward andand a benefit to offer this
generation who wants to makedecisions that align with their
own values.
So we need, for example, laboris a challenge in all
agribusinesses and historicallyagricultural cooperatives I
would say probably relied onquote-unquote farm kids who
understood agriculture to beemployees, and increasingly
(29:11):
we're hiring employees who don'tcome from agriculture, didn't
grow up on a farm maybe, arevery far removed.
But they're coming toagriculture because in the
millennial and Gen Z generation,they want to make a difference.
They make decisions based onalignment of values.
They want to be a part ofsomething.
They want to know that they'remaking a difference, and so I
(29:32):
think cooperatives have a lot tooffer in terms of aligning with
those generations, whether theybe as members or they be as
employees.
So I see us kind of gaining someground again in terms of the
attractiveness of doing businesswith and also working for
agricultural cooperatives.
Is that value alignment andjust how this generation is
(29:53):
making decisions differently.
I'll be honest, my generation,the only thing I cared about
coming out of school, was howmuch are you paying me?
I took a job based on pay aloneand I don't see this generation
doing that.
I see them asking questionsabout what's your culture,
what's your value?
How do you, you know?
Are you a certified B Corp?
They care about things likethat.
Jim Lenz, GEAPS (30:15):
Wow, what a great overview about
cooperatives and their role inour communities.
They play such a big impact.
What are some general closingstatements you want to say
before we conclude here today?
Dr. Keri Jacobs (30:29):
Yeah, you know this is going to sound corny,
but I like to say this because Ithink it's a good framing for
what the cooperative model is.
I say you know, we knowcooperatives are an extension of
(30:51):
their members farms, farmersand ranchers.
But what I mean by that is itallows producers to benefit from
the supply chains in which theyare intricately involved.
That money is not beingexported out of communities,
it's not going to Wall Street,the proverbial Wall Street, and
so you know, I think it's reallyimportant that we recognize
(31:13):
that.
That's the value of the modelis it keeps those investments
local.
If we look back and putourselves in the shoes of the
founding farmers and ranchersmore than 100 years ago we have
23% of our agriculturalcooperatives are more than 100
years old we do realize howpowerful and yet fragile this
model can be.
So success and failure, Ibelieve, ultimately reflects the
(31:35):
membership's appetite, farmers'and ranchers' appetite for
collective action, and I seethat on the upswing today and
I'm really encouraged by that.
Jim Lenz, GEAPS (31:45):
Dr Kerry Jacobs .
I don't know if I could havehad a person on here talk so
eloquently and inform theaudience so much about the role
of cooperatives in agriculturalcommunities, and so that's why
it's so special.
People may want to learn moreabout this and about you and
about your organization and thepeople you work with.
You mentioned earlier you havea podcast.
Please mention that, how tofind it, what it's about, and
(32:08):
any other resources so that wecan direct those listeners to
where you want them to go.
Sure, yeah.
Dr. Keri Jacobs (32:15):
Thanks for that opportunity.
So I'm on LinkedIn and thecenter that I run at the
University of Missouri is theGraduate Institute of
Cooperative Leadership.
Gicl is the acronym.
It's kind of a funny acronym.
That's also on LinkedIn.
The podcast is accessible.
We promote it on LinkedIn.
It's on Apple Podcasts andSpotify.
It is accessible on a website,buildbetterboardscom so that is
(32:43):
the name of the podcast BuildBetter Boards and it's co-hosted
by me and my good friendRichard Fagerland of Peak
Solutions.
So appreciate that opportunityto mention those things.
And we also have a website.
It's.
If you search for GraduateInstitute of Cooperative
Leadership at the University ofMissouri, you can find it.
Jim Lenz, GEAPS (32:55):
Great, and people want some consulting
services or want you to speak.
Is that something you do?
Dr. Keri Jacobs (33:01):
Yeah, we call it outreach at the university
extension and outreach.
Jim Lenz, GEAPS (33:05):
All right.
Dr. Keri Jacobs (33:06):
Yeah, happy to.
Jim Lenz, GEAPS (33:08):
Use those resources you just shared to get
ahold of you and yourorganization.
Super Well, we will make surethat is in the show notes for
each episode.
Uh, and links are there, and ithas been nothing but a delight.
Thank you for spending timewith the GEAPS Whole Grain
podcast listeners thank you,joan, appreciate it that wraps
up this episode of the wholegrain podcast.
(33:29):
A big thank Dr.
Keri Jacobs for sharing herexpertise on the role of
cooperatives in strengtheningthe global food and supply
chains.
Her insights on cooperativegovernance, empowering farmers
and driving innovation offervaluable perspectives for anyone
in the grain industry.
As we've heard today,cooperatives continue to be a
powerful force in supportingfarmers, enhancing food security
and fostering sustainability.
(33:50):
Stay informed and engaged withthe evolving role of
cooperatives is key.
If you want to learn more, besure to explore the work being
done at the Graduate Instituteof Cooperative Leadership at the
University of Missouri.
We'll provide details in theshow notes.
Thanks for tuning in.
If you found this episodevaluable, share it with your
colleagues, subscribe to thepodcast and let us know your
thoughts.
Again, the fan mail is nowavailable.
(34:11):
You can also send me a messagejames@geaps.
com.
We may even feature yourcomments in the show.
Whole Grain is easy to connectwith.
You can go to the GEAPS websiteat www.
geaps.
com/ whole grain.
Find this also on your favoritepodcast apps, such as Apple
Podcasts, Spotify, Amazon Music,Youtube Music, overcast,
pandora.
(34:31):
Just do a search for WholeGrain, hit the subscribe button
and you'll get set on the latestepisodes as soon as they're
released.
Plus, you can catch up on allthe past episodes.
The Whole Grain Podcast islisteners tuning in from 86
countries and continues to growin reach and influence.
If you or your organizationwould like to sponsor an episode
or be a featured guest, or ifyou're interested in creating
and placing an audio commercialfor a future podcast episode,
(34:54):
please reach out to me.
Jim Lenz, director of globaleducation and training at GEAPS.
james@geaps.
com.
We'd love to connect with you.
Until next time, keep learning,keep innovating and keep moving
the industry forward.
Have a great day and thanks forlistening to whole grain.
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