Prairie Feed Co-operative Ltd. is a bright spot on agriculture’s otherwise dull fiscal landscape, with annual sales reaching $26.5 million in 2003.
That same year, the 20-year co-op returned average savings of seven percent to its 300 members in Western Canada.
Robert Haanstra, PFCL’s general manager, said its success is closely tied to the successful financial record of its supplier, Federated Co-operatives Ltd., which has seven feed mills.
While there are many feed companies competing for farmers’ business, Haanstra said PFCL stands apart from the pack.
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“We’re different; we take our earnings and give them back to our members,” said Haanstra, who worked with FCL before moving to the feed co-op.
“Our commitment is to putting money back in the pockets of producers.”
For PFCL president Harry Koeckhoven of Stony Plain, Alta., those dividends have amounted to about $70,000 since he joined in 1989.
The dairy farmer, whose herd grew to 110 head from 20 during this period, said member loyalty and good service keep the co-op strong in a competitive feed marketplace.
“It’s still the best deal around.”
He attributed the co-op’s success to staying the course and operating efficiently.
“I would sooner stay a little small and be very successful so we can pay a lot back to members than do like what other big co-ops did,” he said. “At the end of the day, they lost everything.”
Koeckhoven said Saskatchewan Wheat Pool is an example of a co-op that went “overboard” on its business plan.
Originally named the Poultry Supply Co-operative Ltd., PFCL was formed in 1985 by eight broiler chicken producers who came together to save money on their feed inputs.
The producers hoped to lower costs through volume buying, share the savings generated and form a network of producers to strengthen communications within the feed industry.
Its purpose was “to purchase, procure, process, manufacture, exchange, hire and deal in goods and services for sale to its members.”
The name changed to Prairie Feed in 1987 after producers from other farm sectors and provinces joined.
Americans also joined briefly, but in recent years Alberta has accounted for more than 60 percent of the business.
Members go to their local FCL mill to place their order. The transaction is billed to PFCL. Prairie feed, in turn, charges the farmer for what is ordered.
In addition to feed, the co-op offers animal health products and livestock equipment.
PFCL purchased its office building in Saskatoon in 2002, covering its operating costs by leasing unused space to other tenants.
Federated Co-op provides a 0.19 percent volume rebate for each feed purchase billed through the co-op. As well, FCL makes a patronage allocation to the co-op at the end of the year based on purchases and feed mill earnings.
PFCL has returned an average of seven percent savings to members over the years, including $1.2 million in cash in 2003.
For the future, Haanstra said the seven-member board of directors anticipates no big changes on the horizon.
It plans to keep the business focused on feed, while continuing to promote the merits of co-ops through word of mouth advertising and cultivate new members from different livestock sectors.
