By Dan Rahn
University of Georgia

Opportunities like the Farmers Oilseed Cooperative can enable
farmers who are “market takers” to become “market makers,” says a
University of Georgia expert.

“If a farmer grows soybeans and goes to sell them, he’s got two
choices,” said George Shumaker, an agricultural economist with
the UGA College of Agricultural and Environmental Sciences. “He
can take what the market will give him, or he can store them on
the chance of getting more down the road. Either way, he’s a
market taker.”

If the same farmer joins a cooperative, however, he becomes a
part of the market. “He assumes the role of the ‘middle man’ and
stands to gain the benefits other middle men have been making,”
Shumaker said. “He becomes an owner, a market maker.”

Big change

For most Georgia farmers, he said, becoming part of a cooperative
means changing from being producer of a raw product to being a
producer of a product going directly to consumers.

“You’re not just growing soybeans anymore,” he said. “You’re
producing soybean meal and oil.

“It’s important for farmers to understand that by joining a
cooperative,” Shumaker said, “they’re diversifying their entire
portfolio. They’re becoming part owners in another business.”

The FOC, an oilseed cooperative begun in May 2001, expects to
begin selling stock in the co-op by early November. As soon as
enough shares have been sold, construction will begin on a $55
million processing facility near Claxton, Ga.

Important sales

Shumaker said it’s important for the FOC to begin selling stock
soon for four reasons:

• Beginning stock sales will establish the co-op’s viability in
  people’s minds, moving the effort beyond the concept stage.




• Farmers who need to invest typically have more income in the
  fall and winter.




• Fall and winter are the easiest times to contact
  farmers.




• And the quicker the co-op starts selling shares, the quicker
  they can finish and get on with building the processing
  plant.

Loan guarantees?

The FOC is pursuing a U.S. Department of Agriculture loan
guarantee program that could make stock purchases more attractive
to farmers, Shumaker said.

Regardless of whether that happens, though, Shumaker said
cooperatives like the FOC are an important opportunity for
Georgia farmers.

“While this kind of cooperative is a new concept in Georgia, it’s
widely accepted elsewhere, and we’re quickly seeing it being
applied to other crops here,” he said.

“With the new peanut program, two or three farmer groups are
already forming new cooperatives,” he said. “That indicates to me
that growers are accepting this business form.”