Ground Cover North : Ground Cover 055 April-May 2005 - North
Co-op goes back to the future Agribusiness GROUND COVER APRIL/MAY 2005 24 WORKING TOGETHER The name of the game Walgett Special One Cooperative gets its rather unusual name from the grain it was set up to market. During the harvest of 1987, grain produced in the Walgett district was high in protein but, because of a hot, dry finish (typical for the region) it was of low quality. Consequently, the price was marked down to $65 a tonne – a price that threatened the viability of grain production in the area because the climate meant the circumstances would not be an isolated incident. In looking for answers, the growers formed a cooperative to market the grain from the area as one parcel. Branded ‘Walgett Special One’, this parcel of grain was eventually sold for $95 a tonne, $30 higher than the original offer. The growers realised the benefits of working together and so the co-op was born – officially named ‘Walgett Special One Cooperative’ after the first parcel of grain marketed. By the mid-1990s, it was realised that if the cooperative were to grow, it needed indepen- dent financing. The group approached Rabobank to develop a seasonal harvest facility to allow the cooperative to pay growers independently of marketers. This enabled the co-op to market the crop at the best time, without pressure from other parties. www.anz.com/rural Australia and New Zealand Banking Group Limited ABN 11 005 357 522. All lending is subject to ANZ’s normal lending criteria. A minimum loan amount of $1million applies to this facility. Finally, real financial freedom. The financial landscape has changed forever, because making expansion plans a reality has just become easier. The new ANZ ‘All Seasons’ Facility gives you the freedom to access a pre-determined amount of one million dollars or more, and the ability to switch between selected agri and business loan accounts to enable you to adjust to changing seasonal and business requirements. It really is that simple and flexible. For further details about this innovative lending facility, call your local ANZ Rural Manager today. And experience real financial freedom. Introducing the ANZ ‘All Seasons’ Facility. Against the trend to go corporate, a NSW cooperative is getting closer to its roots, reports Chris Greenwood n One of the stalwarts of graingrower cooperatives, the Walgett Special One Cooperative in NSW, hopes to breathe new life into the role of cooperatives through a review of its operations that will see it become more of a service broker than a service operator. It has also sought to reverse the trend of cooperatives distancing themselves from members in the effort to be more corporate, by looking for ways to get even closer to its roots. After an intensive review of its functions, the cooperative has decided to get out of the increasingly crowded grain marketing arena and instead direct its resources to helping its grower members secure the best deals for their crops. Chief executive officer Ed Colless says the cooperative – which has a reputation for innovation – reviewed its role after questioning the wisdom of trying to compete with large grain-marketing organisations. “We felt our future lay more in getting closer to our members,” he explains. “So we are looking at aggregating supply, and also offering marketing information and services to help members identify and secure competitive options for their grains.” He says the old model provided a homogenous service to members, with the co-op using a levy on each tonne of grain delivered to its contracts, or ‘pools’, to cover operating costs. Under the new model, the co-op’s business will be to provide managed grain pools and contracts as well as marketing information, reducing the reliance on delivered grain to generate its income. Mr Colless says that when the cooperative started in 1987 there were few options for selling grain. But since then there has been tremendous growth in the range of options available for growers. The cooperative has positioned itself to provide its members with more strategic services. This includes aggregating borrowing power to lower pool borrowing costs. “We also look for opportunities to take chickpeas, faba beans and ‘out of spec’ grains and add value,” he says. “The new structure allows us to do that, while at the same time keeping our costs down and allowing us to allocate our scarce capital resources more efficiently.” The cooperative now generates income from a levy based on the amount of grain that members grow, but which is not necessarily sold by the co-op. “We have effectively ‘de-coupled’ the levy system from the grain receival system. We have moved away from having to actually receive grain to support the co-op’s activities.” Mr Colless says that with operational funds coming from the levy system, rather than from attempts to compete with other grain traders, it is able to provide a range of services that help growers access the best market for their grain.
Ground Cover 056 June-July 2005 - North
Ground Cover 054 February-March 2005 - North