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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.

Madsnake
 

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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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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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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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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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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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Discussion Starter #7
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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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...

Ant....
 

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Discussion Starter #9
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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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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one of the main issues with co-ops is they cant raise capital and any fast decisions often have to go to members and takes fore ever. What happen to was it SQP in Victoria seemed to be going ok but has been off the radar for a while now?
Co-ops really work well in niche market situations.
Another one is Walgett special one still going?
And moulamaine??? that one was hugely successful I thought so many work many fail but generally im in favour of them
 

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I am a member of SQP and as stated in earlier posts it gets down to management.
SQP signed there demise when they teamed up with Emerald and lost control of what they were set up to do. They were going OK before Emerald.
 

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As has been stated, the manager and board of directors will determine its success and competitiveness in the market place. Once merger mania sets in you better start looking elsewhere for a place to do business with.


Everyone has their own ideas of why and where to do business with, also what is available in your area, but myself I try to do business with as many as possible to spread out the risk somewhat of managers or financial issues trickling down to me, especially when it comes to prepaying for anything ahead of time, after some problems, its now more a cash and carry prepay, if they don't have the product, we don't pay up front.


I could write pages on the downfalls of coops, but most already know what those are, on the other hand, the owner operator has more of vested interest in keeping the customer happy and coming back and also complaints get addressed far faster and to much more satisfactory results, just an observation I've noticed over the years.


I swear with some of the larger coops, you have to press one for English to speak to anyone, and I usually ask, in your corporate office in the United States or has it moved AGAIN? Maybe I'd better stop before I start to really rant on coops.
 
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