Co Ops - The Combine Forum
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post #1 of 13 (permalink) Old 04-29-2016, 04:07 AM Thread Starter
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Co Ops

Do any Co Ops long term stack up for the growers the own them? Seems on of Australia's biggest been Murrey Golbourn is no batter at delivering returns to its growers than any of the overseas players.

Not follow the milk industry hard just what's been in the media with MGs price this week.

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post #2 of 13 (permalink) Old 04-29-2016, 04:35 AM
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I think Co-op's are only as good as the managers / board that make the decisions. When they first start the board has a vested interest to do right by all involved but as it get older then it gets taken for granted that it's being controlled for the best and rarely is.

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post #3 of 13 (permalink) Old 04-29-2016, 05:00 AM Thread Starter
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Originally Posted by KWO View Post
I think Co-op's are only as good as the managers / board that make the decisions. When they first start the board has a vested interest to do right by all involved but as it get older then it gets taken for granted that it's being controlled for the best and rarely is.
Seems people have emotion attached to co ops and let that cloud good business.
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post #4 of 13 (permalink) Old 04-29-2016, 07:09 AM
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I have know idea what I'm talking about really but we are coop members we are apart of Norco.
I believe that the coop is only as good as the management they have. Size is a limiting factor when they get to big they lose some of the smaller business one on one factor. But I think they need to grow to get the benefits of economy of scale but then they become attractive to other players and get snapped up. This works great for the older members of the business who are on the retirement phase of there life.
I think Murray golburns situation is management made paying to much above market pricing and in all this the world dairy price has been at record lows. Google the goings on in New Zealand dairy farmers and coops going broke left right and Center. In Northern australia we are protected abit as we basically only supply enough for the fresh milk consumption.
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post #5 of 13 (permalink) Old 04-29-2016, 09:20 AM
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list the co op on the share market and may as well not be a co op anymore, defeats the purpose IMO....MG problems are not co op structure related, they are mangement related...no different to any corporate ...rio sacked there ceo a while back...as far from a co op as possible.

easy cannon fodder to use this example as a paint brush to swish over all co ops.

if it wasnt for co ops in this country there would be plenty of people currently farming who wouldnt be...

Ant...
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post #6 of 13 (permalink) Old 04-29-2016, 11:12 AM
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I would like to support the local co-op more, but don't. Generally, basis is 5-9 cents higher, dockage is a set 1%, fert is 10ish% more, wheat protien premiums are 1 cent less, and even after the dividend last year I was down 6 cents vs what others would have gave me. Maybe after you do more business/years there things are better(?), but short term has not been in my favor.
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post #7 of 13 (permalink) Old 04-29-2016, 04:55 PM Thread Starter
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Mildura had lots of Co Op centred around the irrigation district, most are gone with changes in the irrigation district, water and crop types. Seems some of the smaller irrigators failed to get away from the idea of the co op taking there product and supplying there inputs.

I like the idea of no ties and going were is best for me on each deal both sale and buy.
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post #8 of 13 (permalink) Old 04-29-2016, 11:27 PM
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bit harder to do when in a dairy situtation, ive seen a few of the free stylers go broke chasing fresh milk only market.

theres a couple of co op / company arrangements that are doing very well in dairy at the moment...more progressive management who have skin in the game....there making money and pay more than mg....

ceo sacking usually happens when corporate goverance steps are by passed...share market listings have sunk plenty in this country...and in mg case i dont believe they did any capital raising so it was effectively a waste of time...

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post #9 of 13 (permalink) Old 04-30-2016, 02:39 AM Thread Starter
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What's stopping a dairy farmer in a larger dairy area like we're MG operate having two like company's to manage risk?
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post #10 of 13 (permalink) Old 04-30-2016, 04:49 AM
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Nothing, id suspect a few with two farming operations etc do...you can run on the fresh milk trade or free market without contract, it usually pays a premium as they buy the milk in as required to meet supply contracts however you can get caught with no where to send it and being a FMG (fast moving good) its extremely high risk, i watched a few go broke - very good farmers - but rapid expansions means they couldn't survive off the co op price they needed that premium.

Any farming where the item can be stored whether its wheat or coffee has doesn't need as much risk mitigation obviously - this is an advantage that runs both ways - the farmer can use it to there advantage and so can the buyer! In the milk game you cant accumulate fresh milk when its cheap to sell in 6 months time - so hence different structures are needed and that's why different structures exists.

Ant...

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