
Successful partnerships can be found in just about every industry, but the ones that support agriculture are a unique breed because they ultimately benefit everyone in rural communities. In Virginia, one highly effective collaboration has been helping groups of farmers operate more productively and profitably for nearly 20 years.
USDA Rural Development awarded the first of 18 Rural Cooperative Development Grants (RCDGs) to the Virginia Foundation for Agriculture, Innovation and Rural Sustainability (VAFAIRS) in 2007 and has seen those investments yield big dividends over time. The technical and financial assistance provided through these grants have enabled growers across the commonwealth to leverage economies of scale to expand markets for their products.
“The cooperative structure can be effective in meeting economic or social needs in situations where commercial or nonprofit entities don’t have the ability or willingness to step up to fill them,” said Senior Assistant Director Tony Banks. “When there's no light at the end of the tunnel, you may have to address the situation on your own.”
The Central Virginia Poultry Co-op (CVPC) is perhaps the best and most recent example of this team spirit in action. After Tyson Foods closed its Glen Allen processing facility, no other companies expressed interest in resuming operations or placing birds in 265 broiler houses that were left vacant. Local growers faced a bleak future and essentially formed a cooperative out of necessity.
“The Virginia Poultry Growers Cooperative faced a similar situation some 20 years ago when Pilgrim’s Pride decided to exit the turkey business in Harrisonburg,” said Banks. “In both situations, there was an urgent economic need, and a co-op seemed to be the best solution for moving forward.”
Hear the story in his own words.
Banks VAFAIRS Cooperative Month Feature.mp3 |
A farmer steering committee identified an opportunity to produce cage-free table eggs for wholesale buyer Dutch Country Organics and 12 farmers banded together to acquire and place the first flock of laying hens in April 2024. CVPC anticipates expanding its membership to 20 farmers and a total flock of two million hens by the end of 2025.
“With the egg co-op, they knew broiler chicken husbandry but needed to adapt it to layers,” said Banks. “We said, ‘Some of you already have breeder layers, but that's a little bit different than table layers and now we’ve got to create a whole new business from scratch.’ It was literally a chicken and egg type of dilemma trying to work with farmers who’d just had their livelihoods taken away. Converting one of these houses might cost $1,000,000 and they’d just lost their contracts.”
The new generation of co-ops in Virginia also includes organizations that are basically LLCs operating under cooperative principles. Banks says VAFAIRS is working with about a half dozen groups that refer to themselves as co-ops but may not fit the legal definition. Some may have partially worked through the process or haven’t embraced it fully.
“The challenge we run into is they're all so busy with planting, harvesting or raising animals,” said Banks. “I've heard this multiple times. ‘It’s March and we’re getting ready to start setting plants, so we don’t have time to go into it. We'll come back to this in the fall after the crops are in.’ Next thing you know, we're getting another call the next January or February and they need to move forward in a hurry.”
While some producers are uncertain about affiliating with these organizations, co-ops can be a good fit for just about any type of operation. Milk marketing and processing remain strongly viable business enterprises for cooperatives. VAFAIRS is also in talks with several women owned/controlled floral operations that have either recently formed co-ops or are looking for assistance taking the next step.
Assistant Director Whitney Perkins has been overseeing RCDGs for about seven years and values the close working relationship the foundation has developed with RD’s state team. The ability to talk through the program and what it looks like in practice helps them deliver the types of services producers and agribusinesses are requesting of them. VAFAIRS has also hired a full-time financial analyst and is searching for a full-time grant writer to handle the sizable workload.
“As we've grown and added more staff, I've transitioned to a project management role,” explained Perkins. “If we have 20 grant applications due the same day at the same time, I’m looking at how we’re going to get them all submitted on time. Are there gaps in their applications? What information are we missing? We might have 20 due today and 16 tomorrow and I help ensure that workflow is being managed so our quality of service is staying consistent.”
Though the grant limits have changed over the years, VAFAIRS has put the available funding to good use working with producers across the commonwealth and in some neighboring states to promote greater collaboration. The technical assistance the team offers to producers, producer groups and cooperatives includes a comprehensive overview of the pros and cons of this business model.
“There's a lot of education involved to ensure they're informed about these organizations and what it takes to establish them,” said Banks. “They might think ‘I joined this co-op and they're going to provide all my supplies at a discount and I'm going to receive a premium price for everything I try to sell through the co-op.’ That's just not the case.
“Sometimes groups decide that, as a coworker of mine likes to put it, ‘Maybe sometimes the juice isn't worth the squeeze.’ If we can save people money, time and effort using existing market channels and they're happy with their new outlook, we've done them a service.”
“Cooperatives are owned by the members they serve, so it can also be a real challenge to get everyone on the same page at the same time,” added Perkins. “When you have 20 people in the room with 20 fantastic ideas, you need to be a mediator and help them come to a general consensus and move forward.”
Virginia FAIRS works with a wide variety of clients and programs, so co-op support is just one part of a much larger mission for the 501(c)(3) corporation. The nonprofit has a strong track record of helping individuals and groups leverage USDA funding for local meat processing projects and value-added agriculture, offering different types of direct marketing assistance to individuals, organizations and mutually owned entities.
“I think the success really comes from our clients doing what they love and loving what they do and allowing us to come alongside them and help them for a short period of time or a little bit longer depending about where they are in their business development,” said Perkins.
“We're the coach who tells them to keep pushing across the finish line. The best reward for me is when you see a client a couple of months later and get the biggest hug. Then, they say, ‘My son is going to be able to come back to the operation because of this work’ or ‘It was my grandfather's dream to open this portion of our business and now it's actually happening.’”
Learn more about what Perkins had to say about the benefits of cooperatives:
Perkins_VAFAIRS_CooperativeMonthFeature24.mp3 |
Banks recently received an email request from an individual interested in starting a co-op farm supply store and is helping the owner of a small milling operation explore options for some of his customers to form a cooperative that will allow them to assume ownership and operation of the facility. He’s not sure whether the projects will come to fruition but remains available to consult with these clients.
“In some years, you can speak to different groups about co-ops and other types of business entities and just hear crickets,” said Banks. “Then, something like Central Virginia Poultry Growers comes on the scene and you're suddenly inundated with requests or inquiries. At the end of the day, we hope it will help more individuals across Virginia who are seeking this type of technical assistance.”
“We're very thankful for the funding we receive from Rural Development, and I know that our clients are also immensely grateful for the impact ag-related business programs have had on their operations,” added Perkins. “It’s great to see the foundation receive funding and leverage it to help clients access more resources. It feels good to see all those pieces working together to close the circle.”
