Brief Summary of Minutes of Annual Meeting

Brief Summary of Minutes of the Annual Meeting: NCERA-210 Business Meeting Radisson Blue, Minneapolis November 5, 2014 In Attendance Anne Reynolds, Megan Webster, Brian Briggeman, Brent Hueth, Lynn Pitman, William Nelson, Ani Katchova, Phil Kenkel, Jana Walker, Tom Worley, Keri Jacobs, Michael Cook, Michael Boland, Matthew Elliott, Mollie Woods, Sanjib Bhuyan Sanjib Bhuyan called the meeting to order at 4pm. In his Chair’s report, Dr. Bhuyan discussed the survey that was conducted among members of the NCERA 210 to evaluate the value of NCERA 210 to its members. A summary of responses from the survey was presented and reveals that most indicate they joined the group for networking and research opportunities. Among the responses of how NCERA 210 can be more effective / productive were: committee should meet with the USDA during the summer (data needs), connect research presented with eXtension; publish proceedings, and use social media (e.g. LinkedIn). In her Secretary’s report, Dr. Jacobs discussed NCERA 210’s effort engaging with undergraduate/graduate students and concluded that the AAEA annual meeting most logical place to develop students’ awareness of NCERA 210's work. Among the options for achieving this include (i) organize short meeting/session to present the work ongoing through NCERA 210 to students at the AAEA annual meeting in 2015, (ii) submit a section proposal for a track session at the 2015 AAEA annual meeting, (iii) identify industry ties, have them be part of the message; examine what opportunities may exist inside/outside academia that link with industry. Among other discussions, William Nelson (CHS Foundation) provided an update on Elroy Webster Coop Studies Fund Scholarship. One recipient was selected this year and because there were many applicants, the CHS Foundation is considering providing more opportunities for the scholarship next year. Nominations Nominating Committee Report and Elections are as follows: Dr. Ani Katchova was nominated as the secretary for NCERA 210 for the 2014 – 2015 term. A vote of the meeting attendees confirms her nomination. Dr. Brian Briggeman, vice-Chair now becomes Chairperson replacing Dr. Bhuyan who becomes the immediate past-chair. Dr. Keri Jacobs becomes Vice-Chairperson. Dr. Brent Hueth remains Treasurer of the NCERA 210. Journal of Cooperatives The Journal of Cooperatives is still active and felt to be an important outlet for the group. A special issue on theories of cooperatives is in the works where classic research articles on cooperative theory will be published. Also considering a special edition on other topics: profit distribution in cooperatives, the use of non-qualified distributions, etc. This group is encouraged to consider the JOC as a research outlet for their own work. eXtension Dr. Phil Kenkel provided the eXtension update. eXtension held a webinar on Mar 13, 2014 entitled, "The Use of Non-Qualified Distributions in Agricultural Cooperatives." Materials available at at www.extension.org/pages/61310/archived-cooperativeswebinars#.VGeU0M15V8F. The webinar materials include a case study, white paper, and responses to frequently asked questions. Participation and post-webinar interest was high and continues. Dr. Kenkel is pursuing publication of the webinar materials (case study) with the NSAC. eXtension could benefit from consistent content from this group, needs to be peer-reviewed. Website The website has been successfully moved to U of Wisconsin (UWCC). This puts the treasurer’s account, website and registration at the same institution and should improve future coordination. The meeting adjourned at 4:39pm.

Objective 1. To promote and coordinate timely research on cooperatively owned business organizations for agricultural marketing, agricultural input supply, vertical coordination through value added processing, and rural services. Accomplishments of Objective 1 during 2014: The Cornell University Cooperative Enterprise Program (CEP) coordinates applied research with its outreach efforts. The CEP initiated two research projects in 2014: (i) examining the challenges of food hub businesses in aggregating, marketing and distributing source-identified products from small- and mid-sized farms when accessing intermediary market channels, and (ii) examining the need for and preferred business structure of food hub businesses located in the 6-Northern New York counties located along the Canadian border. The University of Wisconsin Center for Cooperatives (UWCC) has undertaken several research project in 2014 that benefit the cooperative sector. These projects include (i) Dairy Pricing Research: UWCC and the UW Center for Dairy Profitability are implementing a USDA Agriculture and Food Research Initiative grant program to research geographic pricing and competitive issues in the dairy industry. The aim of this research is to determine the influence of distance, presence of cooperatives and farm-level heterogeneity on milk prices. The program will develop a model to characterize and measure market power where cooperative and non-cooperative buyers compete for farmers' output. By collecting farm-level price data, the team will be able to provide farmers with benchmark reports that compare prices between nearby farms; (ii) U.S. Census Project: UWCC staff is developing models for identifying cooperatives and their performance using a variety of data sources, which will enable richer analysis of their behavior and year-to-year performance. Researchers will be able to compare cooperatives on national, state and local levels and provide a snapshot of key economic indicators such as wages, assets and revenues. This research will inform and provide recommendations to the U.S. Census Bureau of the importance and need for reporting on the economy-wide impact of cooperative businesses; (iii) Annual Cooperative Business Survey: UWCC staff implemented the annual cooperative business survey which gathers basic annual financial data from cooperative firms, including patronage equity and refund practices. The results of the survey, implemented through financial support and collaboration from the National Society of Accountants for Cooperatives, gathered data to promote further understanding of financial management practices across cooperatives sectors, and was presented at the NSAC Board meeting in February 2014. This research is part of an ongoing initiative to evaluate cooperative behavior and performance. Dr. Richard Sexton at University of California - Davis have been working on cooperatives' pooling arrangements and the insurance benefits pooling provides in the presence of heterogeneous and stochastic product quality. The idea is that if the cooperative pools revenues across products of heterogeneous quality and the ability to produce high-quality products is stochastic, then an insurance benefit is conferred, which risk-averse producers will value. Dr. Sexton's recent work has covered to cases where producers differ ex ante in their ability to produce the high-quality product. Thus, high-quality producers still get an insurance benefit, but on expectation they will share revenues with low-quality producers. Dr. Sexton and his co-authors studies settings when the insurance benefit is strong enough to support pooling equilibria even with heterogeneous producers. Three classic articles on cooperative theory by Dr. Jeffery Royer of University of Nebraska-Lincoln (UNL) were published in the Journal of Cooperatives, and a 47-page monograph on cooperative theory was published on the UNL Digital Commons. The neoclassical theory of agricultural cooperatives has been useful for generating insights into the behavior of cooperatives in various market structures, helping cooperatives develop business strategies consistent with their objectives, and informing public policy decisions concerning cooperatives. Dr. Royer also published an article on determining a cooperative's cost of equity in Cornhusker Economics explaining the importance of assigning an appropriate cost to cooperative's equity capital that its members provide. Last but not the least, members of NCERA-210 continue to coordinate research and education efforts for the improvement of cooperative performance. This is evident from the research and outreach efforts of the NCERA 210 members. Additionally, a major accomplishment of the NCERA-210 is the continued publication of the Journal of Cooperatives. NCERA-210 member Dr. Phil Kenkel serves as editor for the Journal and NCERA-210 members are frequent contributors as well as frequently serving as reviewers. Objective 2. To serve as a forum for industry and government decision makers in management and staff research positions to interact with land grant researchers and extension specialists to share research results and discuss implications for cooperative business organizations, their producer members, farm structure, efficiencies in food production and distribution, the environment and economic well being of rural communities. Accomplishments of Objective 2 during 2014 Members of the NCERA 210 continued to deliver much needed teaching and training to the agricultural cooperative sector through their research, extension and outreach activities. Such activities included, (i) Dr. Keri Jacobs delivered an extension program to address the needs of agricultural cooperatives in Iowa in partnership with the Iowa Institute for Cooperatives; it included the Director Certification Program (DCP), and also Board Presidents and Managers Workshops; (ii) The Cornell University Cooperative Enterprise Program (CEP) in conjunction with the Northeast Cooperative Council (NECC) convened the Leaders Forum in the NECC annual meeting where professional development and networking opportunities were provided for for 150 directors and senior level managers of agriculture and rural electric cooperatives in the region. The 2014 event focused on "Strategic Decision Making through Tactical Leadership" which included presentations from cooperative leaders on topics ranging from decision making and risk mitigation in the global marketplace, strategic succession management in cooperative leadership, and targeting messages for cooperative leaders; (iii) the UWCC organized the 17th Annual Farmer Cooperatives Conference, November 2014 (http://www.uwcc.wisc.edu/outreach/FCC/current/program.html). This annual national conference regularly attracts top cooperative business leaders and industry experts who attend to share the latest research and trends, and to learn and exchange ideas with CEOs, cooperative directors and others doing business with agricultural cooperatives; (iv) Dr. Jacobs taught a upper-level undergraduate course on cooperatives where students learn about the cooperative business structure and investigate the governance, financial, and economic justification of cooperatives in a semester-long course. Cooperative leaders in the agricultural and telecommunications industry are regularly invited to the class; (v) Dr. Sanjib Bhuyan was funded by the Council on Food, Agricultural and Resource Economics (C-FARE) to develop cooperative curriculum for high school economics students. The project developed teaching modules focusing on the economics and operation of cooperatives in conjunction with the State Councils of Economic Education and the Council for Economic Education (CEE); (vi) Dr. Michael Cook worked with 20 graduate students, 50 undergraduate students, and 10 graduate students under the auspices of the Graduate Institute of Cooperative Leadership (GICL) in activities and workshops that totaled over 500 participants, both national and international; (vii) Dr. Brent Hueth and other UWCC staff taught a semester-long undergraduate class on cooperatives during the Fall 2014 semester. The class includes an analysis of basic principles, structure and organization, finance, history, and role in U.S. economy and in developing countries; (viii) Dr. Michael Boland presented his research work on cooperative finance, governance, and strategy to more than 750 directors in South Dakota, Montana, Washington, Oregon, Idaho, California, Wisconsin, Nebraska, and Minnesota; and (ix) members of NCERA 210 are intricately involved in the eXtension Cooperatives Community of Practice, and have initiated some promotion and education of cooperatives with FFA and other youth groups. Internship programs for college students seeking employment in the cooperative industry have been developed at Oklahoma State University, Texas A&M University, and elsewhere. Last but not least, The MSU Product Center was successfully wrote a grant for the USDA-RD Cooperative Development Grant. These funds were used to support cooperative business development activities for emerging and existing cooperatives in Michigan. In addition, the MSU Product Center, in cooperation with the Michigan American Cooperative Council provided training for over 20 cooperative managers and executives in an advanced coop management course. The MSU Product center also hosted three short courses for small and emerging cooperatives in Michigan in separate areas of the state.

2014 Publications and Presentations: 1. Boland, M.A., J.M. Crespi, and T.M. Turner. "Measuring Sunk Costs in the Agricultural and Food Industry: Why Some Assets Sell Below Appraisal." Journal of Agricultural and Food Industrial Organization. 12(2014): 53-63. Available online http://www.degruyter.com/view/j/jafio.2014.12.issue-1/jafio-2014-0009/jafio-2014-0009.xml?format=INT. 2. Briggeman, Brian C. and Chuck Mickelsen. "Financial Trends and Needs of Cooperatives and Implications of Consolidation in the Farm Credit System," ACCC Fact Sheet Series, January 2014. 3. Briggeman, Brian C. "The Millennial Generation: Observations and Thoughts for Cooperatives," HR Consortium Meeting hosted by United Benefits Group, Kansas City, Missouri, October 2014 . 4. Briggeman, Brian C. "The Cooperative Business Model," Meeting of Cattle Producers on Developing a New Meat Processing Facility, Ottawa, Kansas, September 2014. 5. Briggeman, Brian C. "Equity Redemption Strategies," Emerging Leaders: Building a Cooperative Finance Foundation, Manhattan, Kansas, July 2014. 6. Briggeman, Brian C. "Patronage Income Distribution Policy," Emerging Leaders: Building a Cooperative Finance Foundation, Manhattan, Kansas, July 2014. 7. Briggeman, Brian C. "The Importance of Cash Flow," Emerging Leaders: Building a Cooperative Finance Foundation, Manhattan, Kansas, July 2014. 8. Briggeman, Brian C. "Building and Analyzing Cooperative Financial Statements," Emerging Leaders: Building a Cooperative Finance Foundation, Manhattan, Kansas, July 2014. 9. Briggeman, Brian C. "Thinking Like a CFO," Emerging Leaders: Building a Cooperative Finance Foundation, Manhattan, Kansas, July 2014. 10. Briggeman, Brian C. "Financial Drivers Facing Cooperatives," Emerging Leaders: Building a Cooperative Finance Foundation, Manhattan, Kansas, July 2014. 11. Briggeman, Brian C. "Cooperatives Finance Workshop," Kansas Cooperative Summer Intern Training, July 2014. 12. Briggeman, Brian C. "Cooperatives 101," Kansas Cooperative Summer Intern Training, July 2014. 13. Briggeman, Brian C. "Future Needs of Cooperative Education," Cooperative Education Forum at the National Council of Farmer Cooperatives Meeting, Washington, DC, June 2014. 14. Briggeman, Brian C. "Economic Update," National Society of Cooperative Accountants Midwest Chapter Annual Meeting, Wichita, Kansas, June 2014. 15. Briggeman, Brian C. "Cooperative Industry Trends," Valley Co-op Board Planning Session, Wichita, Kansas, March 2014. 16. Briggeman, Brian C. "Moody's Rating Methodology: Application to Garden City Co-op," Garden City Co-op Board Retreat, Wichita, Kansas, February 2014. 17. Briggeman, Brian C. "Cooperative Finance Workshop," Kansas Director Development Program, Wichita, Kansas, December 2013. 18. Briggeman, Brian C. "Co-ops 101," Kansas Director Development Program, Wichita, Kansas, December 2013. 19. Briggeman, Brian C. "Implications of Global Market Drivers for Cooperative Producer-Members," Emerging Leaders: Building Trusted Relationships, Manhattan, Kansas, December 2013. 20. Cook, M. L., R. Savoie, and R. Almog. "Agribusiness as the Anchor: The Role of KijaniAgro", International Food and Agribusiness Management Review, Vol. 17, Special Issue B, 2014. 21. Cook, M.L. "Stakeholder Participation in Cooperative Governance in North America", Cooperative Innovations in China and the West, ed. Caroline Gijselinckx, Palgrave Macmillan, 2014. 22. Cook, M.L. and Su Ye. "Price Stability and Economic Sustainability - Achievable Goals? A Case Study of Organic Valley", American Journal of Agricultural Economics, 97(2): 635-651, 2015. 23. Cook, M.L. and G.N. Francesconi. "Transformation of Agrifood Systems: The Need for a More Comprehensive Framework", in Collective Action Among African Smallholders: Trends and Lessons for Future Development Strategies, IFPRI-WCAO Thematic Research Note 05, International Food Policy Research Institute, March 2014. 24. Elliott, Matthew, Lisa Elliott, and Evert Van der Sluis. "Future Socioeconomic Status of Farmer Cooperative Members: Implications for Cooperative Participation and Governance." NCERA-210 Annual Meeting, Minneapolis, MN, November 5, 2014. 25. Franken, J.R.V and M.L. Cook. "Informing Measurement of Cooperative Performance", Interfirm Networks - Cooperatives, Franchising and Strategic Alliances, eds. Josef Windsperger, G. Cliquet, G. Hendrikse, and T. Ehrmann, Springer, 2014. 26. Jacobs, K. "Financial Perspectives on Agricultural Cooperatives." Invited presentation to the National Agricultural Credit Committee Meeting, Federal Reserve Bank of Kansas City, Kansas City, Missouri, October 16, 2014. 27. Jacobs, K. "Understanding Equity Systems." Presentation and development of materials for understanding equity management systems, Farmers Cooperative (FC), Ames, Iowa August 18, 2014. 28. Jacobs, K. "Co-ops 101." Presentation and development of an educational module for Farmers Cooperative in Ames, Iowa. March 11, 2014. 29. Jacobs, K. "Who Owns the Cooperative?" AgDecision Maker Newsletter, Iowa State University, February 2014. 30. James M. White and Michael A. Boland. "Minnesota Township Mutual Fire Insurance: Determinants of Survival, 1974 - 2010." Journal of Cooperatives, 28(2014):1-26. 31. Kenkel, P., M.A. Boland, and D. Barton. "Understanding NonQualified Distributions." The Cooperative Accountant LXVII(Summer 2014):2-10. 32. Lindsay, Morgan and Brian C. Briggeman. "To Like or Not to Like: The Use of Social Media in Agribusiness Firms," Journal of Extension, 52(2014): 31AW1. 33. Pierre Mérel, Tina L. Saitone, and Richard J. Sexton. "Risk Reduction and Cooperatives' Revenue Pooling in the Presence of Adverse Selection." Paper presented at the conference "Producer Organizations in Agricultural Markets" Toulouse (France), September 4-5, 2014. 34. Plunkett, B., F.R Chaddad, and M.L. Cook. "Challenge Dairy Cooperative 2000-2010: In Pursuit of Control of the Last Litre of Milk", Sustainable Cooperative Enterprise: Case Studies of Organizational Resilience in the Cooperative Business Model, ed. Tim Mazzorol, Edward Elgar Publishing, 2014. 35. Royer, J. "The Neoclassical Theory of Cooperatives: Part I." Journal of Cooperatives, 28(1), 2014:1-19. 36. Royer, J. "The Neoclassical Theory of Cooperatives: Part II." Journal of Cooperatives, 28(1):2014, 20-35. 37. Royer, J. "The Neoclassical Theory of Cooperatives: Mathematical Supplement." Journal of Cooperatives, 28(1):2014, 36-49. 38. Royer, J. "The Theory of Agricultural Cooperatives: A Neoclassical Primer." (pp. v + 47), 2014. DigitalCommons@University of Nebraska-Lincoln. http://digitalcommons.unl.edu/ageconfacpub/123/ 39. Royer, J. Determining Your Cooperative's Cost of Equity. Cornhusker Economics, February 19, 2014. 40. Russell, Levi A. and Brian C. Briggeman. "Distributing Patronage Income Under Differing Tax Rates and Member Risk Preferences," Journal of Cooperatives, 29(2014): 27-49 41. Shanoyan, Aleksan, Brian C. Briggeman, Ben Harmon, Kelsey Harris, Jacob Haverkamp, Russell Heier, Jordan Holder, Cassie Kniebel, Kellie Jackson, Trevor Lutz, Tyler Warta, Alisa Wendelburg. "Cooperative Innovation: The Case of Team Marketing Alliance," International Food and Agribusiness Management Review, 17(2014): 187-197 42. University of Wisconsin Center for Cooperatives (UWCC). Investing in your co-op's future, Rural Cooperatives Magazine, January/February 2014. 43. University of Wisconsin Center for Cooperatives (UWCC). National Council of Farmers Cooperatives Annual Meeting-February, 2014 44. University of Wisconsin Center for Cooperatives (UWCC), Staff delivered training to co-op directors about board evaluation at the NCFC annual meeting, 2014. 45. University of Wisconsin Center for Cooperatives (UWCC), 2013 Annual Cooperative Business Survey, February 2014. 46. University of Wisconsin Center for Cooperatives (UWCC), Staff delivered survey results to NSAC board directors at the NCFC annual meeting. 47. University of Wisconsin Center for Cooperatives (UWCC), Economic Impacts of Cooperative Firms in Wisconsin: An Overview, October 2014. 48. University of Wisconsin Center for Cooperatives (UWCC), Staff published the findings on the economic impacts of cooperatives in Wisconsin using 2012 data and a 2013 IMPLAN analysis. UWCC staff created an impacts calculator on its website to support basic understanding for this type of cooperative impact analysis. 49. University of Wisconsin Center for Cooperatives (UWCC), U of Wisconsin-Madison Farm Industry Short Course-March, 2014. 50. University of Wisconsin Center for Cooperatives (UWCC), Staff taught two sessions on cooperatives in agriculture as part of the course Rural Social and Economic Issues. 51. University of Wisconsin Center for Cooperatives (UWCC), ACE Institute, July 2014 52. University of Wisconsin Center for Cooperatives (UWCC), Staff presentation on the Economic Impacts of Cooperative Firms in Wisconsin project as part of a forum on connections between research and practitioners and educators 53. University of Wisconsin Center for Cooperatives (UWCC), Buy Local Buy Wisconsin Roadshow-November 2014: A staff member was one of two speakers in a weeklong workshop series for farmers and food processors on the legal aspects of starting a farm business.