Wyoming Cooperative Model
description
Transcript of Wyoming Cooperative Model
![Page 1: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/1.jpg)
Wyoming Cooperative ModelWyoming Cooperative Model
A Case Study
5th Annual
Farmer Cooperatives Conference
November 15, 2002
![Page 2: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/2.jpg)
The Wyoming Cooperative ModelThe Wyoming Cooperative ModelEvolves cooperative structure into new formsOffers flexibility in structureCooperatives may be organized similar to LLCOpportunity for outside investmentCooperative owners are it’s members
– Patron Members– Investment Members
Patron members guaranteed 15% profit distributionWyoming model effective 7/1/01
![Page 3: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/3.jpg)
Cottage Grove CooperativeCottage Grove Cooperative
Core Divisions
Feed GrainEnergy Agronomy
Supporting Divisions
Hardware Stores
Convenience StoresTruck Stop
Heating & Cooling
TransportationServices
![Page 4: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/4.jpg)
Union CooperativeUnion Cooperative
Core Divisions
Feed GrainEnergy Agronomy
Supporting Divisions
Convenience Stores
Tire SalesTransportation
Services
![Page 5: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/5.jpg)
Reasons behind an Reasons behind an Agronomy Joint VentureAgronomy Joint Venture
Enhance profitability – greater ROIExcel in customer service over a large trade
territoryEfficient utilization of people and assetsProduce necessary critical massIncrease purchasing powerMaximum advantage of dealer programs
![Page 6: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/6.jpg)
Events Leading to the Events Leading to the Formation of LandmarkFormation of Landmark
Our supplier, Agrilliance, owned four facilities near our trade territory
Union Cooperative handled the accounting for Agrilliance for a fee
Cottage Grove and Union had earlier developed a joint venture in Precision Agriculture
Agrilliance and both boards met to plan the futureBusiness service manager employed to lead
feasibility study of combining nine agronomy locations
![Page 7: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/7.jpg)
Landmark ContinuedLandmark Continued
Attorney hired to create joint venture agreementWyoming model selected for business structureName selection committee appointedLandmark Services Cooperative organized in
October 2001
![Page 8: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/8.jpg)
![Page 9: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/9.jpg)
![Page 10: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/10.jpg)
Landmark Startup CostLandmark Startup Cost
50% investment by Union and Cottage GroveLandmark is approved for $12 million dollar
seasonal line of creditComputer related expenses exceeded $100,000 Attorney fees - $50,000Consulting fees $5,000Selection of name and logos - $2500Identification of vehicles and facilitiesSearch of General Manager
![Page 11: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/11.jpg)
Operating LandmarkOperating LandmarkNew equipment is purchased by LandmarkPresent facilities and equipment are leased to
LandmarkEmployees are Leased to LandmarkCottage Grove administers human resource
programsLandmark profit stream 60%CG and 40% UnionUnion can increase investment to 50% profit distCG and Union each distribute patronage to growers
![Page 12: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/12.jpg)
Landmark Governance StructureLandmark Governance Structure
Union Director
Union CEO
CGController
CGCEO
Union Controller
CGDirector
Board of Directors
LandmarkGM
Hub Managers
Employees
EdgertonJudaCottageGrove
Evansville
Employees EmployeesEmployees
![Page 13: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/13.jpg)
Computer SystemsComputer Systems
User Group Selected SSI SoftwareInitial learning curveChallenge to setup customers, products, tonnage
taxes, etc.Evaluated and upgraded hardware at all locationsConnected all locations with wide area network
![Page 14: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/14.jpg)
Accounting SystemsAccounting Systems
Blended Cultures between the agronomy locationsAdoption of 5% cash discount programChanged statement due date to the 20th of each
monthDevelopment of fall deferred billing programEmployees initially resistant to changesDevelopment of newsletter to communicate policies
![Page 15: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/15.jpg)
Development of Future joint Development of Future joint VenturesVentures
Wyoming model is favorable for many applicationsEach player should have reasonable profit
expectationsCommunications to customers and employees
should be given high priorityBringing philosophies & business practices together
is a major challenge
![Page 16: Wyoming Cooperative Model](https://reader035.fdocuments.us/reader035/viewer/2022062422/5681401b550346895dab6d74/html5/thumbnails/16.jpg)
ContinuedContinued
Startup costs generally will be higher than budgetedEliminating employee positions may not be as high
as anticipatedPlan for tighter marginsForming Landmark Agronomy Services firmly
positions our cooperative for future success