Starting A Local Food Co-Op

Marketing and selling food products grown on the farm can be a challenge. Forming a cooperative is a way to join forces and accomplish what you can’t do alone. Done right, the economics benefit everyone.

Madeline Schultz is the women in agriculture program manager at Iowa State University Extension. She says a cooperative is a business structure, and the right steps have to be taken to ensure its success. The first step is to form a steering committee.

"That’s basically your group of people who want to start this cooperative and they are responsible for doing some market research," she says. "Through that market research, they’re going to identify who do we want to provide goods and services to? How do we describe that particular audience?"

After the market information has been collected, determine the need for capital. How much money will this new cooperative take to get off the ground and to remain viable in the future? Schultz says the key here is hiring good management and paying for their worth. Prepare a business plan, secure financing, and have someone who can answer legal questions that come up.

You’ll need to advertise this new cooperative to potential members. Tell them how it works and encourage them to join.

"Usually there’s some guidelines for members about what they can expect, what they can do, and what they cannot do – especially with grower cooperatives – so the members need to understand what those policies and guidelines are," she says.  "And, there’s usually an application process."

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