Federation of Southern Cooperatives
Land Assistance Fund

Cooperative Marketing: Interviews with Members
of the Indian Springs Farmer's Cooperative in Mississippi

Members pack broccoli for shipment; packaged spinach from the co-op; the co-op's logo for watermelon

There are 42 members of the Mississippi Indian Springs Farmers Cooperative Association of which 31 are active. The co-op was incorporated in 1981. Members of the co-op purchase shares ($200) that are invested and members also pay annual membership dues ($12). The majority of the co-op members are farmers, although some have now retired.

To fulfill its marketing goals and contracts, the co-op affiliates with at least four other cooperatives in the state.

The co-op owns a “state of the art” packing shed in Petal, Mississippi. It has a cooler for storage, washing tubs, sorting tables and other equipment for processing the produce from co-op members.

The following are some of the prices for processing at the co-op: members pay 0.75 per box to keep produce in a container in the cooler for 7 days if the member packages it; and $1.00 a box if the co-op sorts and packages.

Spring and Winter Crops
The Spring crops grown by the co-op members include watermelon, squash, okra, bell peppers, peas, butter beans, cucumbers, sweet corn, arugula, spinach, lettuce mix, parsley, basil, and lemon grass.

The Winter crops are collards, turnips, mustard, kale, and spinach.

Deciding What to Grow
The cooperative members discuss the crops to be grown at the beginning of the crop year. Then, the individual farmers decide which crops they are interested in growing. The decisions made are based on how many acres the co-op wants and/or needs for the market demands for a particular crop.

Then the individual farmers will decide what they want to grow from that discussion depending, of course, on how many acres the co-op needs per crop and the individual co-op member’s acreage availability.

The co-op also plants crops based on what the members know they can sell. This is based on having done this for so many years and also on their market research.

One member said, “An important factor would be the land size of the particular farmer’s acreage. Some have plots that are smaller than the next farmer. Some people might have 1 acre, some might have a half acre, some might have 20 acres, or 75 acres. Then, the members plant what they think they can handle or what they can market. The land size is definitely a variable in this decision.”

Regarding the costs of production, harvesting and packaging, the individual co-op members will make their own decision and plant accordingly.

The co-op members collectively, however, will make the decision as to what the co-op can sell and how much it can sell. The co-op will also project the income for co-op members based on the crop production decisions.

"If some company calls for a shipment of peas, we already know whose got the largest volume of peas and we’ll call the individual co-op members and say ‘we need so many more bushels of peas to make the load to go to meet that demand’. Supply and demand is what it’s about.”

Market Research
The cooperative conducts market research. The members talk with vendors to explore new market outlets, utilize their marketing person as well as the state 1890 land grant university.
“We do have a marketing person here who helps with this,” said one co-op member, “and we also use marketing staff at Alcorn State University to develop the marketing strategy for the season. We try to coordinate markets with other cooperatives in the state - so that if one co-op is not able to produce what it needs for a market, another co-op can help. We are constantly searching for new markets and new concepts of collaboration.”

Markets & Transportation
The co-op markets its produce at “fresh markets” (direct markets) in New Orleans, Chicago, Memphis, Jackson (MS), and Boston.

The cooperative generally ships its produce in a co-op owned truck. There are usually two co-op drivers for long distances. However, for major shipments of, for example, watermelon sent to Boston, the co-op will lease or contract with a shipping service.

Pricing of Products
The cooperative also conducts a considerable amount of research to determine the prices of its products and website information features prominently.
The research includes information from posted internet sources such as what the prices are at the farmer’s market in Thomasville, Georgia, and the departments of agriculture across the south. The cooperative members said that the pricing of the produce depends on “what the cost of production is, your labor costs and considering what the current market price is. But you’ve got to stay in the market price range. So, what we sell fluctuates in price depending on the market where we sell our products.” The transportation costs are also included in the price.

“The Georgia farmer’s market in Thomasville, Georgia opens up every morning with new prices and we have a direct link to that internet service. In the Thomasville market those crops are bid on much like cattle - the buyers are there bidding on your produce and they open up almost like Wall Street. You have to figure out what you have in that crop - your expenses - if you can’t sell above your expenses you really have no business being in agriculture.”

“Supply and demand determines the price as well. With high supply, the prices are lower - low supply, the prices are higher. Consumer demand sets the stage."

Transportation Costs and Pricing
The cost of transportation and related expenses are included in the selling price. “For a case of watermelon, we pay $1.50, $2.00 a watermelon from a co-op member and we try to get $3.00 when we’re taking it to Memphis, Tennessee or to Oxford, Mississippi markets. So you try to fill that cost in that price.” All of these additional prices cover the cost of transportation.

Best Markets for Immediate Return
Some co-op members say that the direct markets offer the best immediate money. Businesses generally pay the farmers some 45 or 60 days after the sale whereas the direct markets offer immediate gratification. Farmer’s markets are, however, its secondary markets.

Commercial markets, however, are the primary markets for the co-op, such as the Alliance Food Service, A&P in New Orleans and Red Tomato in Boston where you can get a better overall price for the products. The co-op also sells to some restaurants.

Promotional Efforts
The cooperative utilizes a number of methods for promoting its products, from branding, word-of-mouth, mailing information, and the co-op is also in the process of developing it’s own website for promotional purposes. Promotional efforts for the co-op also include enhancing the presentation of products at the direct market.

One of the most important marketing concepts used by the co-op is the “branding” of its products by the use of it’s own logo placed on products.  

Services to the Co-op Members
“At the shed, we sometimes store products for members, a lot of which they’ll sell themselves - and then some we’ll take and sell to other markets. This is a service for the members."

Payments to Co-op Members
When produce leaves the co-op, each member fills out a form (3 copies) in order to track the produce. The co-op works on an honor system when members fill out their forms. The members take the white sheet with them and the pink one stays at the co-op and the yellow one goes into the co-op’s office and that’s how the co-op tracks the individual co-op members produce. The co-op members are generally paid in less than 30 days.

Income Diversity
While the co-op encourages its members to sell their produce through the co-op (the co-op would like this to be 100%). Some members do sell their crops individually, however most of their crops are sold through the co-op.

Advantages to Marketing Cooperatively with Comments from the Co-op’s Marketing Manager
• “
When one co-op member can bring his 20 boxes of bell peppers and another co-op member can bring his 20 bushels of peas over, whatever the case may be, we can market as a group. Then we command a better price on the market and can fill a large order at one time. (We can say to customers) ‘Yes, we have it, we can deliver and this is the price we expect to receive in return.’ And then that comes back to the farmer and he gets his check - whether its a sale from to a commercial outlet or to a farmer’s market. That kind of service commands a higher price.”

• “The main advantage is that you’ve got a lot of little folks pooling their produce to one big involvement.”

• “The packing shed has made a whole lot of difference because, before that, we used to wash the greens outside and then put them on the truck and it was very cold. We had to go Laurel, Mississippi to get ice – now we don’t need to that. “

•  “Now that we have the model for packing we’ve got to compete with today’s market and being able to wash, grade and bag it and put our name on it helps considerably. We’re selling to restaurants and you can get good prices from them.”

• “The cooperative provides services that members wouldn’t normally have as an individual. Like being able to purchase equipment of the magnitude we have at Indian Springs. When you get large quantities sometimes you need to store it for several days before you can get it to market or until you can get enough volume out of that field to take to market and the co-op provides the opportunity to store these large quantities. So that’s one of the advantages of marketing cooperatively.”

• “The cooperative members can also help with and share their time at direct markets rather than having this responsibility fall onto an individual.”

• “The co-op is also able to command a better price as a collective unit compared to an individual marketing effort.”

* The research was thanks to a RME-CSREES Cooperative Marketing Grant

(Interviews conducted in 2006)