Farmer cooperatives in South Africa and Peru will improve their profitability, productivity, resilience and competitiveness in the marketplace as the result of a new five-year, $7.7 million grant from the United States Agency for International Development (USAID). This project coordinated by GENEX, a cattle genetics cooperative headquartered in Shawano, Wisconsin, will build on work completed in the previous eight years through similar grant-funded activities.
GENEX is the program partner for this USAID Cooperative Development Program (CDP), which focuses on building the capacity of cooperative businesses for self-reliance, local ownership and sustainability. As a cooperative itself, GENEX sees the value in living out the cooperative principle of cooperation among cooperatives.
“The CDP is an opportunity for our cooperative to share its business values while using its products and services to improve farms of all shapes and sizes, worldwide,” explains Matt Gartman, a dairy farmer from Sheboygan, Wisconsin, who participated in GENEX’s previous CDP activities in South Africa by presenting on cooperative governance.
Building on past success
Since 2010, GENEX has worked in South Africa to help build agricultural cooperative businesses. The goal has been to elevate these developing businesses as suppliers to local and regional processors, sellers of value-added products, and buyers of inputs from local and regional firms. The strategy included a business-driven approach to helping farmers run strong commercial-scale businesses.
As an example, during the first phase of the project GENEX staff with expertise in beef cattle genetics and reproduction traveled to South Africa to provide consultation and training to a cooperative desiring to offer artificial insemination services to members. The GENEX representatives worked with local partners to provide training and conduct the first inseminations. Opportunities like this - within the grant-funded venture - create new markets for GENEX products while also benefiting smallholder farmers.
In the previous round of funding, GENEX CDP activities in South Africa have helped 13 cooperatives achieve substantial growth. In eight years, the cooperatives experienced a 713% growth in sales, 510% growth in profit and near-total growth in patronage dividends.
The next step
With the new five-year, $7.7 million grant, GENEX intends to further support South African and Peruvian dairy and beef producers and their cooperatives. Together with in-country partners, GENEX will provide business-planning guidance, technical assistance from industry mentors, better access to affordable financing, and finally, training and networking to develop sound cooperative governance. The overall goal is to improve the producers’ and cooperatives’ profitability, productivity, resilience and competitiveness in the marketplace.
After his experience in South Africa, Gartman reflects on the results he witnessed and hopes for the project’s future. “It’s clear to see the CDP has and will provide farmers with an opportunity to grow their livelihoods while also bringing value-added U.S. goods to an expanding market. It’s all about cooperatives helping cooperatives succeed in the global agriculture industry.”
“GENEX leads change,” stated Huub te Plate, GENEX Chief Operating Officer, in his address to delegates at the cooperative’s annual meeting Jan. 23 in Bloomington, Minnesota. “Throughout history, we have delivered key innovations and led industry changes. If we stop changing, we stop leading.”
During his management report, Huub spoke of the changes the cooperative underwent in 2018. The most significant was the formation of a new parent company URUS, through the combination of Cooperative Resources International and Koepon Holding BV. The combination, completed in October 2018, was the culmination of a yearlong process which included a milestone vote of support by GENEX delegates.
“This combination of a cooperative and a privately-owned business was an industry first. It has resulted in an organization of enormous scale - second to none in the cattle artificial insemination industry – and holds many opportunities for GENEX members and customers,” stated Huub.
He went on to explain that areas, such as the genetics program and semen production operations, have been centralized under URUS. Centralizing these activities enables the creation of efficient production facilities to maximize the quantity and quality of semen produced.
Other business changes during the year included the divestiture of CENTRAL LIVESTOCK and the transition to GENEX as a global brand.
GENEX experienced below budget results for 2018. “The U.S. was challenged with continued low milk prices and issues with other commodities,” noted Huub. “These same dynamics that affect your farm or ranch profitability level also impact your cooperative and created an operating environment that made achievement of the budget difficult.”
Also impacting revenue was the industry’s shift to using beef semen on dairy females. “Targeted breeding programs using GenChoice™ sexed semen along with beef semen appear to be a long-term trend. In fact, beef into dairy sales quadrupled throughout the year. This, however, displaced use of conventional dairy semen,” stated Huub. “On the bright side, GENEX is positioned to help you make informed strategic breeding decisions through use of our Calf MathSM and Beef x Dairy programs.”
The international market showed some recovery from the previous year with retail operations in Brazil, Canada and Mexico gaining market share. The dairy market in Brazil was in crisis and sales figures reflected the difficulty, yet beef semen sales were strong. The Mexican dairy industry struggled as well, though herd care product sales and increased interest in beef A.I. showed huge opportunities. Among other major markets, GENEX dairy semen sales growth was realized in China and Russia while they struggled in Argentina. Beef semen sales in Argentina were solid.
Through all the change and the global economic turmoil, GENEX council President John Ruedinger, a dairy producer from Van Dyne, Wisconsin, expresses optimism for the future. “Through all this, we need to hold fast to our cooperative business status and mentality. We need to do more than brand GENEX as a cooperative. We need to remain relevant to members by asking for their feedback and responding to their needs. We need to ensure the next generation of producers is involved in and driving their cooperative’s future.”
John concluded by saying the decision to form URUS is one delegates should be proud of. Their foresight and vision to create a new company means the future is bright and the vision is clear for GENEX.
Members Elected to GENEX Council
Also at the annual meeting, five cattle producers were elected to three-year terms on the cooperative’s 13-member council.
Casey Dugan of Casa Grande, Arizona, was elected to his first term. Casey, a graduate of Northern Arizona University, is owner of Desperado Dairy and a third generation dairy farmer.
Re-elected to the council were Daniel Tetreault of Champlain, New York; Lamar Gockley of Mohnton, Pennsylvania; Kay Olson-Martz of Friendship, Wisconsin; and Jody Schaap of Woodstock, Minnesota.
Following the annual meeting, the GENEX council elected officers. Those holding officer positions for 2019 include:
› John Ruedinger, Van Dyne, Wisconsin - president
› Bobby Robertson, Tahlequah, Oklahoma - first vice president
› Harold House, Nokesville, Virginia - second vice president
› Ron Totten, Stafford, New York - secretary
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