Pride, tradition keep co-ops strong

RUSSELL, N.D. — The town of Russell really isn’t a town.

There’s a sign saying it was established in 1906 and not much else: no church, no post office, no school and no recognizable roads. The town might have had streets or roads 40 years ago, but they’re now overgrown with trees and weeds.

What Russell does have is a grain elevator: not an abandoned wooden one but a functioning elevator with concrete storage bins and a Canadian Pacific Railway line.

It remains in operation because it’s part of the Souris River Cooperative, which has four elevators in north-central North Dakota, about 50 kilometres south of the Canadian border.

Tom Hall, a Souris River Co-operative director, farms three km from Russell and his family has supported the co-op for generations. He continues the tradition because the co-op provides local services and offers competitive bids for local grain.

More importantly, producers control the organization.

“We have a say in what gets done here … and (we) try and create a company that serves our needs,” Hall said, as he leaned back in a chair in the co-op’s boardroom at the elevator.

“I think it ensures there’s a certain amount of competition…. If every facility available to us was owned by a multinational, there wouldn’t be many of them around here.”

The co-op, which employs 32 people, also owns or has a stake in a bulk fuel business, an agronomy company, convenience store and a diesel engine repair shop.

Archer Daniels Midland has a terminal 50 km to the south, CHS is to the west and Paterson Grain is building an elevator in Bottineau to the north.

Souris River is affiliated with CHS because it relies on the Fortune 100 company for insurance and hedging accounts, but farmers around Russell independently own and operate the co-operative.

Souris River members don’t expect their co-op to offer higher bids for wheat, corn or soybeans, but its presence creates competition between grain buyers.

“Some of the other (elevators) around us, if we weren’t here they could decrease their bids and still obtain more grain than they could even handle,” said general manager Cameron Erickson.

The elevator in Russell is not unusual in North Dakota. The state has 60 co-operative grain elevators out of about 350 elevators.

The farmer-owned elevators persist because they provide a counter-balance to the power of massive grain companies, but pride and tradition have also contributed.

“The basic co-operative principles … explain a lot of the culture of our state,” said Jason McKenney, a co-operative specialist with the North Dakota Farmers Union.

“Autonomy and independence is one of the principles in North Dakota…. The co-ops were founded on the principle of, well, we’ve got to do this ourselves…. (Also), as the generations (change), they say I have to be a good steward for this co-op because my grandfather helped found (it) way back when.”

Souris River co-op directors mention pride of ownership and tradition, but the word “control” came up numerous times. Farmers on the board like having the power to push the co-operative in a certain direction so that they get the local services they need.

For instance, the co-op runs a diesel shop in the nearby town of Newburg. If it didn’t exist, area farmers would have to travel to Minot for engine repairs.

“By having that local control, you don’t have to wait for someone else to do it,” Erickson said.

In the spirit of local control, the directors recently decided to in-vest millions of dollars in the expansion of the Russell elevator to enhance storage, rail capacity and loading equipment.

“We’re putting up a $9.5 million project this summer,” Erickson said. “(It’s) an all-out effort … to make sure this facility (in Russell) is here for the next 40 years.”

Like most co-operatives, Souris River returns profits to its members through dividend checks, also known as patronage. Members also build up equity in the co-op, which can be cashed out when they retire.

“We certainly have people in this co-operative that have triple digit (hundreds of thousands) equity numbers,” Erickson said.

Nathan Boll, a Souris River director who looks like he’s in his early 30s, can still remember his first cheque when he was eight years old.

“Dad sold a load of grain and I got a $8.75 patronage check.”

The dividend and the long-term equity still has meaning for him, but others don’t share his view.

“The younger farmers, they could give a rip about the dividend. It’s just a cheque they cash at the bar at the night of the annual meeting,” he said.

“For the older guys, that’s a big deal. Some of them have sizable equity accounts and they’re getting ready to cash out.”

McKenney agreed that younger producers are more interested in the best price for their grain, re-gardless of who’s offering it.

Selling them on co-operative values will be critical because the movement needs to groom the next generation of members and leaders.

“Complacency kills, is what the military uses as a slogan,” McKenney said. “When everybody is profitable and everything is good, people tend to forget.”

Erickson isn’t as worried. Cooperatives like Souris River will have to evolve but they will survive.

Souris River members will vote later this month on a merger with Bottineau Farmers Elevator. If approved, the merged co-operative should be large enough to last for decades. That means Russell will continue to be relevant, or partly relevant, McKenney said.

“You (are) still considered a town if you have an elevator and a bar.”

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