Co-ops Expand

grain elevatorsFarmers have always cooperated with each other. They’ve had to. The earliest settlers in the American West had to help each other bring in the harvest. They banded together in threshing crews. They gathered to raise a new barn. If someone was sick or injured, neighbors came together and got the work done.

In the 1940s, this spirit of teamwork became big business as rural cooperative marketing and purchasing organizations became significant fixtures in the agricultural economy. When the decade began, the national Council of Farmers’ Cooperatives claimed some 4,500 affiliates. Most of those co-ops were in the wheat and corn belts of the Midwest.

In most Midwestern towns, the co-op grain elevator was the largest structure on the main street. Often there would be a gas station and farm supply store close by, also owned by the members of the co-op association. In many states, farmer-owned purchasing cooperatives sold feed, fertilizers and other supplies at prices lower than privately-owned commercial enterprises. In the late 1940s, the cooperative movement was growing.

The idea for cooperatives first appeared in Europe in the 19th Century when workers in the textile mills in Rochdale, England, formed a co-op food store. They thought that by pooling their purchasing power they could buy food cheaper than the company store was offering. The store succeeded, and others copied their ideas.

first co-op elevator in NebraskaIn the U.S., most co-ops were formed by farmers, either to help them buy inputs at lower cost or help them market their products more efficiently and at higher prices. The first cooperative grain elevator in the U.S. was started in Madison, Wisconsin, in 1857. But it wasn’t until the early 1900s that co-ops began to have long-lasting success in the U.S.

The first co-op elevator in Nebraska was built in the York County town of Benedict in 1902. Farmers around Benedict weren’t happy with the prices they were getting from local commercial elevators. So, they organized to sell their grain cooperatively. That first year, shares were sold to local farmers at $10 a share. (Later, that price was raised.) The new owners raised over $3,000 to build their own elevator. After the wooden structure went up, there were two mysterious fires, each set just before harvest. The incidents of arson stopped after the co-op hired a night watchman with orders the “shoot to kill” suspicious persons.

winton wrightWinton Wright’s family has been involved in the co-op movement for most of those years. “My first experience [with the co-op] was 1944 when I first farmed 80 acres,” he says. “At the time, you paid $50 to be a member… And I got my $50 back the first year with dividends, profits they made for me when I sold grain. And I’ve been a very strong cooperative person ever since.”

In 1922, the Capper-Volstead Act exempted cooperative marketing organizations from anti-trust legislation.

The co-op movement was supported enormously by the New Deal in the 1930s. President Roosevelt’s advisors believed that cooperative ventures were a way to help farmers help themselves. Several New Deal programs made loans or grants to co-ops, and the Farm Security Administration set up its own cooperative farmsteads across the country.

With the postwar economic boom, co-ops boomed as well.

Farms Co-op Board of Directors MeetingOn the marketing side, local elevators began banding together to sell large quantities of grain to regional, national and even international buyers.

On the purchasing side, cooperatives grew as well.

  • In 1915, 59,000 co-op members spent $12 million on co-op supplies, but that only accounted for less than one percent of the total spending on farm purchases.
  • In 1936, farmers were making 20 percent of their purchases through co-ops, spending over $250 million.
  • By 1950, fully a third, 33 percent, of farm purchases were through co-ops.

Written by Bill Ganzel, the Ganzel Group. A partial bibliography of sources is here.

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