Shedding light on the value of member-owned business model during National Co-op Month

By Harold Cooper

October is an important month for U.S. farmers.

It’s the month that the bulk of harvesting takes place, and it’s when farmers’ hard work is celebrated at harvest festivals across the nation. It’s appropriate that October also is recognized as National Co-op Month since cooperative systems are critical to modern agriculture and to the local economies of communities like ours.

Seymour-based Premier Companies is a farmer-owned cooperative serving most of southern Indiana as well as parts of Ohio and Kentucky. We are now nearly 100 years old, and I couldn’t be prouder of Premier’s and our farmers’ shared success.

Few people who do not work directly with the agriculture industry are aware of how common the cooperative business model is and how valuable it has been over the past century. By definition, a co-op is a company that is owned and operated by the people who use its products and services. Many companies, like Premier, have found longtime success due to the shared decision-making, personal impact and community-oriented mindset that are inherent to the co-op structure.

For example, when Premier Companies was founded in Seymour in 1927, America was coming out of the first World War and about to enter the Great Depression. Farmers were frustrated because they were having a hard time getting supplies, fair pricing and quality products, so they took it upon themselves to start a co-op to overcome these challenges. Decades later, our network has grown to include roughly 4,000 farmers and 400 employees.

Today, Premier provides supplies and services in the agricultural and energy sectors, including liquid fuels, propane, seed, fertilizer, crop protection and retail supplies. We sell about 100 million gallons of liquid fuels a year, providing up to 20,000 homes with propane heat and feeding about 200,000 hogs each year.

Premier remains farmer-owned and farmer-controlled, but that doesn’t mean we are guaranteed to get 100% of our member-farmers’ business. To be successful, we have to make sure farmers are central to the decision-making process and their values, needs and interests are represented in the marketplace. This model allows a farmer to have a say and influence, and it keeps Premier connected to the farmers and community members we serve.

One of the most important advantages of a cooperative is that a significant amount of our profit goes back to our farmer-owners in the form of patronage based on purchases they have made. A portion of patronage, 70% in our case, is returned in the form of cash, and 30% is assigned to the farmer as equity and is used by Premier to help fund ongoing operations.

The reason co-ops are so successful is that farmers, as independent as they are, still have needs in common and see better results working cooperatively than they would by themselves.

We also try to give back as much as we can. Five percent of our bottom line goes directly back to our immediate communities, focusing on rural communities and youth. Examples include 4-H, FFA, volunteer fire departments and cancer research. We’re also paying wages, taxes and patronage that are direct and indirect investments in our local communities.

In addition to being a co-op ourselves, Premier is an owning member of the nationwide Land O’Lakes Inc. cooperative. Being a part of a larger co-op network positions us to help tackle bigger issues, like modernizing the agriculture sector, supporting rural communities and even global food security and climate change.

The value of the cooperative system cannot be replaced, and it is something to be celebrated.

Because of it, over the last century, we’ve built something that is trusted, respected and has proven to be reliable and sustainable as a business practice. We hope to be a part of the Seymour community and many others for another 100 years. We believe maintaining our member-owned business model will put us on the right footing to do so.

Cooper is chief executive officer of Seymour-based Premier Companies. Send comments to [email protected]