By Doug Rich
Farm to market roads around the country have provided producers with an outlet for their production and consumers with a steady stream of food and fiber.
However, these roads are congested today with closed cooperatives, open cooperatives, contract production and limited liability corporations (LLC) as farmers try to capture as much value as possible for their products, take advantage of new technology and react to consumer demands.
David Morris, Chillicothe, MO, and Bill Becker, Denton, KS, are two farmers trying to find their place on this busy highway.
Morris farms in partnership with his father, Ora Morris, in Livingston County, MO. They farm 1,700 acres of row crop and have a 50-head commercial cow herd.
"Dad takes care of the cows and I do the crops and marketing of the grain," says Morris. "My wife and two young sons help on the farm, also."
Morris and his family grow corn, soybeans and sorghum. "I just started raising corn again last year for the first time in years. I have been raising a lot of grain sorghum in the last few years."
Grain sorghum has been a good crop for Morris because he can grow it on hill ground not suited to corn or soybeans and it costs less to produce than corn or soybeans.
"The milo will always produce a crop and I very seldom have milo yield under 100 bushels to the acre," says Morris.
Because there was not a local market for grain sorghum, Morris bought a tractor trailer rig several years ago and began hauling his grain to markets outside his area.
At first, most of his grain sorghum was hauled to Atchison, KS, where they wanted a high moisture grain. Now, if he can get the crop dry enough, Morris hauls the crop east--where it can be loaded on a barge and taken to processors in Mississippi.
His search for better markets lead to his involvement in Missouri Value Processors, a group of area soybean producers who want to built a soybean processing plant, in Chillicothe, MO. The original feasibility study for a processing plant was done in Daviess County, MO, which is northwest of Chillicothe.
"The Daviess County Industrial Development Authority wanted to do something to help the farmers in their area," says Morris. "After the study, they decided Livingston County was better suited to this project, because of the railroad and highway access."
In March, 1999, an organizational meeting was held in Chillicothe and Morris got on the steering committee. Later, a board of directors and officers were elected.
This group recently secured a second grant for a more focused feasibility study and a marketing plan. After the first feasibility study, a grant was used to write a business plan.
Their goal is to build a plant that can process 9 million bushels of soybeans a year and produce 200,000 tons of meal, 50,000 tons of oil and 17,000 tons of hulls. A unique feature of this plant is that it will be designed to switch from one variety to another variety in hours, instead of days, and keep them separate.
For example, this might mean switching from a commodity soybean to an identity preserved soybeans, such as a non-GMO soybeans. According to Morris, Missouri Value Processors will need 750 to 1,500 investors to make it work.
Investors will need to buy shares and will be obligated to provide soybeans to the processing plant. These can be soybeans they produce or soybeans they buy on the local market.
If everything goes as planned, they hope to be selling shares in the fall of 2000 and the spring of 2001 and the plant should be completed by early 2002.
Morris is part of another group called Show-Me-Quality Grains. This is a non-organic grower group seeking to deal directly with foreign markets for specific grain products. They currently have three pending contracts--two contracts for soybeans and one contract for high oil corn. "I think this will tie right in with our processor group," says Morris.
"There is a lot of interest in this thing right now," says Morris. "As a farmer, I can't just go to the elevator and take what they will give me. We need to be the processors. I think this is what it will take to survive."
Finding a way to survive as an independent farmer is one reason Bill Becker, Denton, KS, joined with other northeast Kansas farmers to form AgraMarke, Inc.
The idea for AgraMarke, Inc., began three years ago when the elevator in Everest, KS, was up for sale. "Twenty-one producers pooled their resources and formed the Everest Alliance to buy the elevator," says Becker." "Now that we had this unity, we wondered how we could use it to market our crops.
"We decided we needed an entity that was separate from the one that bought the elevator," says Becker. "We needed a marketing cooperative."
Those 21 producers plus several other area producers and landlords formed AgraMarke, Inc.
"We are an open cooperative, but we have a stock purchase membership fee," Becker said. "It is an open cooperative, in that the number of members is not limited, but we cannot be flooded with more members than we have opportunities. We control membership as it comes along."
The name, AgraMarke, Inc., stands for agricultural research, education and marketing.
The group decided they wanted to do more than just market their crops. They wanted to do research, share that information with the other members and educate themselves about new production methods, as well as new markets.
"Why should every farmer make the same mistakes," says Becker. "Why not work together to eliminate the pitfalls of taking on new technology by learning together."
Their research projects could look at anything from variable rate application of fertilizer to genetic seed selection for specific markets.
For example, they might select an improved variety with specific traits, such as higher protein or larger kernels, do field tests to determine if that variety can be successfully grown in their area and then use that information to find a market. "This way, farmers can learn together," he says.
On the marketing side, they want to make themselves accessible to larger players by working together. AgraMarke, Inc., has had some success in the last year and half, but the members still are looking for additional opportunities.
Although this group has focused on what they have expertise in, which is production, they have not ruled out other value added opportunities, if they come along.
Producers need to work together, if they are going to successfully merge on to the crowded farm to market road. A strong organization must be able to handle administration, marketing, research, vision and politics. A farmer can not do all of this by himself.
To start an organization like Missouri Value Processors or AgraMarke, Inc., it must be built with producers loyal to the organization, it must have tangible goals, it must have strong relationships and it must have patience.
"I think that agriculture will have to seek the most efficient way to get things done," says Becker. "Currently, the most efficient way to market is by working together. If we don't flow to the most efficient way of doing things, we will be out of business."