Satisfying producers as well as consumers critical for building a successful co-op

By Tom Parker

When the High Plains Food Cooperative in Atwood opened for business in May of 2008, its first shipment of 21 orders totaling $785 in products fit in the trunk of a car. Since then the cooperative has grown at the rate of almost 40 percent per year and now consists of nearly 50 food producers and over 300 customers, with $180,000 of products sold during 2014. That explosive growth is all the more impressive when you realize that Rawlins County, population 2,589, lies a mere 50 miles from the Colorado border on the high, dry plains of northwestern Kansas.

The genesis of the cooperative began in 2005 when Chris Schmidt, who with his wife, Sherri, farms and ranches near Atwood, attended a conference in Lindsborg sponsored by the Kansas Farmers Union and the Ogallala Commons. Guest speaker Bob Waldrop, one of the founders of the Oklahoma Food Cooperative, spoke about food cooperatives and local food markets, and his enthusiasm and passion planted the seed for further discussions with Rawlings County Economic Development Director Chris Sramek. Follow-up meetings with small-scale producers throughout the county and with subsequent input from the Oklahoma Food Cooperative led the producers to form the High Plains Food Cooperative in 2008.

Its success has involved a steady evolution in marketing and management, distribution logistics and guaranteeing that both consumers and producers get what they want. It’s also crushed their three-year business plan, necessitating discussions of expansion and drafting five-year plans that factor in five- and ten-time growth objectives over the next five years.

“We’re busting at the seams already,” said Leon Atwell, co-founder of Advancing Rural Prosperity, Inc. and technical advisor to the cooperative. “We have a lot of product and a lot of distribution and a lot of customers, but we have to focus on the producers. If we don’t have a product to sell, we don’t have anything to sell.”

Atwell spoke about running a successful food co-op at the annual Kansas Farmers Union convention in Manhattan in early December. With him were Sramek, an Atwood meteorologist, farmer and business coach for aspiring entrepreneurs, and Schmidt, the cooperative’s president and Kansas Farmers Union board member.

“A 40 percent annual growth is really scary,” Atwell said. Equally scary is trying to meet demand while simultaneously meeting consumers’ expectations and perceptions. The cooperative’s target base is the Denver metro area, which means many of the customers are, as Atwell puts it, far removed from the realities of dryland agriculture. Hail, drought, extreme temperatures and other weather-related factors can reduce product output, but customers still expect their orders to be filled on time.

From a producer’s standpoint, there are other challenges as well. “Many of these customers are fairly high end and have high expectations,” Atwell said. “Products better be high quality. It’s not like taking grain to the elevator.”

One of the questions he is constantly asked is whether the cooperative is a food co-op, a food hub or a food aggregator. It’s actually a little of everything. “We aggregate food from multiple producers and deliver to consumers,” he said.

Mostly, though, consumers are concerned about where their food comes from, knowing the food has been safely processed, and developing a relationship with the producer, he said. “In many regards,” Atwell said, “that’s more important than price.”

The cooperative operates its own Web site where customers place their orders at the first of each month. There’s a list of products being sold that week as well as a section where each producer tells a story about their farm and how they produce their products. High Plains Food Co-op demands total transparency from its producers, Schmidt said. There are few restrictions on products but the cooperative doesn’t approve of confinement operations, and all products must be ag-related.

On the second Thursday of each month orders are closed. Delivery day begins in Atwood with orders loaded into a pair of enclosed trailers, and then on to St. Francis with more products being picked up en route. From there they drop down to I-70 and on to Denver where the city has offered an affordable distribution site. Orders are sent out to pickup points around the city or delivered via route managers. Within two hours or less, Schmidt said, over 200 orders are filled.

Recently, however, local CSAs have begun to cut into sales. In response, the cooperative tackled four areas, Atwell said: customer surveys, customer profiles, identifying geographic areas and identifying growth partners.

“We looked at our products from the standpoint of retail pricing and did an extensive market analysis,” he said. “We’re now working on expanding production in eastern Colorado and Nebraska, and focusing on product growth areas to meet consumer demand.”

Ultimately, though, the cooperative consistently measures its value system and what’s important to the group, as well as finding ways to increase revenue generated back to the producer, Atwell said.

“Our goal is to to grow rural communities and rural economies and rural families,” he said. “The pitch we’re making that seems to resonate is that this is the way for a young person to come back home. Maybe there’s a value-added piece to bring a young person back and increase young adult population in western Kansas.”

Kansas Farmers Union is the state’s oldest active general farm organization working to protect and enhance the economic interests and quality of life for family farmers and ranchers and rural communities. For more information, visit www.kansasfarmersunion.org or call 620-241-6630.

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If you would like more information about convention, or wish to schedule an interview with KFU President Donn Teske, please call Nick Levendofsky at 785-527-0941 or email Nick at kfu.nick@gmail.com

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Photo: “Chris Sramek, High Plains Food Cooperative Vice President for Consumers, was the Rawlings County Economic Development Director in 2008 when he helped launch the online food hub. Since then the cooperative has grown at the rate of almost 40 percent per year and now consists of nearly 50 food producers and over 300 customers, with $180,000 of products sold during 2014.” Available here.

Photo: “Chris Schmidt, High Plains Food Cooperative President and member of the Kansas Farmers Union board, says the co-op demands total transparency from its producers. There are few restrictions on products but the cooperative doesn’t approve of confinement operations, and all products must be ag-related.” Available here.

Photo: Leon Atwell, technical advisor to the cooperative, says “Our goal is to to grow rural communities and rural economies and rural families. The pitch we’re making that seems to resonate is that this is the way for a young person to come back home. Maybe there’s a value-added piece to bring a young person back and increase young adult population in western Kansas.” Available here.

Kansas Farmers Union is the state’s oldest active general farm organization working to protect and enhance the economic interests and quality of life for family farmers and ranchers and rural communities since 1907. We believe family ownership of farm land is the basis for the world’s most viable system of food and fiber production, and that maintaining this family farm system will preserve our natural and human resources.

2016-11-04T21:46:29+00:00