Wyoming Cooperative Model
A Case Study
5th Annual
Farmer Cooperatives Conference
November 15, 2002
The Wyoming Cooperative Model

Evolves cooperative structure into new forms
 Offers flexibility in structure
 Cooperatives may be organized similar to LLC
 Opportunity for outside investment
 Cooperative owners are it’s members
– Patron Members
– Investment Members

Patron members guaranteed 15% profit distribution
 Wyoming model effective 7/1/01
Cottage Grove Cooperative
Core Divisions
Feed
Energy
Grain
Agronomy
Supporting Divisions
Hardware
Stores
Convenience Stores
Truck Stop
Heating & Cooling
Transportation
Services
Union Cooperative
Core Divisions
Feed
Energy
Grain
Agronomy
Supporting Divisions
Convenience
Stores
Tire Sales
Transportation
Services
Reasons behind an Agronomy
Joint Venture
Enhance profitability – greater ROI
 Excel in customer service over a large trade
territory
 Efficient utilization of people and assets
 Produce necessary critical mass
 Increase purchasing power
 Maximum advantage of dealer programs

Events Leading to the
Formation of Landmark

Our supplier, Agrilliance, owned four facilities near
our trade territory
 Union Cooperative handled the accounting for
Agrilliance for a fee
 Cottage Grove and Union had earlier developed a
joint venture in Precision Agriculture
 Agrilliance and both boards met to plan the future
 Business service manager employed to lead
feasibility study of combining nine agronomy
locations
Landmark Continued

Attorney hired to create joint venture agreement
 Wyoming model selected for business structure
 Name selection committee appointed
 Landmark Services Cooperative organized in
October 2001
Landmark Startup Cost

50% investment by Union and Cottage Grove
 Landmark is approved for $12 million dollar
seasonal line of credit
 Computer related expenses exceeded $100,000
 Attorney fees - $50,000
 Consulting fees $5,000
 Selection of name and logos - $2500
 Identification of vehicles and facilities
 Search of General Manager
Operating Landmark

New equipment is purchased by Landmark
 Present facilities and equipment are leased to
Landmark
 Employees are Leased to Landmark
 Cottage Grove administers human resource
programs
 Landmark profit stream 60%CG and 40% Union
 Union can increase investment to 50% profit dist
 CG and Union each distribute patronage to growers
Landmark Governance Structure
Board of Directors
Union
Director
Union
Union
CG
CEO Controller Director
CG
CG
CEO Controller
Landmark
GM
Hub
Managers
Evansville
Cottage
Grove
Employees
Employees
Juda
Edgerton
Employees Employees
Computer Systems

User Group Selected SSI Software
 Initial learning curve
 Challenge to setup customers, products, tonnage
taxes, etc.
 Evaluated and upgraded hardware at all locations
 Connected all locations with wide area network
Accounting Systems

Blended Cultures between the agronomy locations
 Adoption of 5% cash discount program
 Changed statement due date to the 20th of each
month
 Development of fall deferred billing program
 Employees initially resistant to changes
 Development of newsletter to communicate policies
Development of Future joint
Ventures

Wyoming model is favorable for many applications
 Each player should have reasonable profit
expectations
 Communications to customers and employees
should be given high priority
 Bringing philosophies & business practices together
is a major challenge
Continued

Startup costs generally will be higher than budgeted
 Eliminating employee positions may not be as high
as anticipated
 Plan for tighter margins
 Forming Landmark Agronomy Services firmly
positions our cooperative for future success