Farmer-owned cooperatives have long been a foundational mechanism for Minnesota growers to work together for collective benefit. The first Minnesota farmer cooperatives date back to the 1890s.
For 15 years, AURI’s Rural Cooperative Development Center (RCDC) has helped support that cooperative spirit while enhancing those businesses’ ability to grow. The Center uses cooperative development as a strategy to support and grow rural economies by delivering services to new or existing cooperatives. AURI provides technical assistance in a range of areas, including business assistance, product assessment, feasibility analysis, market evaluation, and more.
AURI’s Center has received federal support through the USDA Rural Cooperative Development Grant (RCDG) program. The RCDG program enables nonprofit organizations to operate cooperative development centers that support rural economic growth and job creation through the cooperative model.
“We started the Rural Cooperative Development Center in 2011, and the focus of that Center is to assist rural businesses, existing co-ops, or steering committees that are looking at becoming co-ops. We walk them through the process of assessing whether a co-op is an appropriate business structure for the venture,” says Michael Sparby, AURI commercialization director. “We’ve been very successful. We do a number of feasibility assessments, both on the economic and technical side of things, as well as efficiency enhancements for existing co-ops.”
The RCDC has supported hundreds of projects with more than 16,000 coop members/owners since its inception, with substantial success. Impacts from the co-op assistance to Minnesota entities include over $168 million in new capital investment and nearly $277 million in increased revenue. Support from the RCDC has also led businesses to create or retain over 760 jobs.
Sparby says AURI has worked closely with a wide range of co-ops, including several Minnesota ethanol plants looking to streamline processes or identify new revenue streams.
Chippewa Valley Ethanol Company (CVEC) in Benson has undertaken several projects through the RCDG program. The program has helped support CVEC’s forward-thinking mission.
“One of the first things the board here did was decide that they wanted to add value, and that was through corn to fuel. Then they added diversity to that platform and utilized that approach to continue adding value across different revenue streams for the facility. That’s been a large portion of our success,” says CVEC General Manager Chad Friese.
Whether it was exploring the use of corn cobs to produce natural gas or assessing alternative agricultural feedstocks for cellulosic ethanol conversion, Friese says CVEC has not been afraid to innovate. Many of their efforts were supported by AURI’s Rural Cooperative Development Center.
“Just about every time we’ve ever done anything, it’s been through this program,” Friese says. “It’s been new markets, it’s been alternative products, so we go back quite a way.”
Friese says CVEC has utilized AURI technical assistance
and facilities in the cooperative’s quest for ongoing growth
and innovation.
“As a cooperative, we’re always looking for ways to return value to our local shareholders and to our local community,” Friese says. “I’m very happy with the relationship and collaboration we’ve had with AURI over the years. We will continue to work with them, given the opportunity.”
Diverse Applications
In addition to farmer-owned ethanol cooperatives, AURI has supported a wide variety of entities looking at multifaceted applications through the RCDC. A few examples of those various projects are stated below.
AURI recently helped a Minnesota livestock producers’ group assess the feasibility of forming a cooperative to share freezer and cold storage space. The producer group had established a customer base and believed it would benefit from cost savings and operational efficiencies through the cooperative sharing of infrastructure and logistics.
AURI worked with a dairy doing on-farm processing to evaluate coproducts to improve efficiency and potentially generate additional value-added products or revenue streams.
A group of growers enlisted AURI to evaluate the efficacy of an alfalfa-based foliar fertilizer. AURI assisted by assessing the process and technology, as well as addressing whether a co-op would be the best structure for advancing the venture.
AURI’s Rural Cooperative Development Center served a dry bean grower group to further value-added processing opportunities targeting the dry bean ingredient market. Those services were intended to increase opportunities for both processors and farmers and to diversify Minnesota’s agricultural economy.
A food co-op requested aid from the RCDC to warrant a financially sound expansion to a new location. The project required design, legal, and other predevelopment services associated with the expansion.
Farmers Union Industries has partnered with AURI on several projects ranging from biofuels to new value-added uses for ag fibers.
“The word that best describes AURI is collaborative,” says Troy Bryant, director of construction and project management for Farmers Union Industries. “They bring different minds and different expertise. They pull from industries across the state, across the region, for us to leverage.”
Connections
The RCDC not only offers a range of assistance to Minnesota rural companies and cooperatives but also has another strength: dovetailing with other resources.
“It’s a program that works hand-in-hand with other resources that are out there,” Sparby says. “For example, the Minnesota Department of Agriculture has a co-op grant program. The RCDG works with that program, as well as other resources that Minnesotans can tap into.”
Not all the groups AURI has worked with have chosen to move forward as cooperatives. AURI’s feasibility work has also caused some entities to put the brakes on possible ventures. True to AURI’s mission, sometimes helping cooperatives avoid costly mistakes is as valuable as identifying new opportunities.
“The RCDC has been a very productive program for rural businesses and co-ops as well as for AURI because it’s a program that fits well within our function and mission as an organization,” Sparby says.
More information on the Rural Cooperative Development Center is available at auri.org.
- The RCDC has supported hundreds of projects with more than 16,000 coop members/owners since its inception, with substantial success.
- Impacts from the RCDC to Minnesota entities include over $168 million in new capital investment and nearly $277 million in increased revenue.
- Support from the RCDC has also led businesses to create or retain over 760 jobs.