Profits cause dissension at Illinois hog coop

17-12-2008 | |

The Meadowbrook Farms Cooperative opened a $28 million plant in 2004 with fanfare and big expectations, figuring it might become a model for improving what then was the state’s declining pork industry, writes Jim Suhr for the Associated Press.

At the time, the Illinois cooperative hoped that by operating its own plant and taking hogs only from its members, farmers would be brought closer to consumers willing to pay premium prices for high-quality meat. Four years later, that dream is in turmoil. Some members say they’ve been underpaid for their hogs — some to the point of ruin.©

A majority of the Belleville, Ill.-based cooperative’s shareholders voted against a measure last week by critics who hoped to explore selling the 6-year-old enterprise. Of 698,250 total shares in the cooperative — one for each hog delivered by a member each year — a simple majority, or 349,126 votes, were needed to approve looking into selling the venture. But votes in favour of the measure only numbered 150,575, or about one-fifth of the total shares.

Members declining
Backers of the measure publicly have accused the cooperative’s board of mismanagement, pressing that they were not being heard. Members also have complained they’re being paid $20 a head less than fair market value, costing them millions. Membership numbers stand now at 118 hog producers, down from the some 200 when the cooperative began in 2002.

Jim Burke, the cooperative’s president and chief executive, said that the vote convinced him that dissenters are a minority, and the cooperative has managed $2 million more in profits this year over 2007, despite tight cash flow and credit markets.

The cooperative’s farmers are paid according to the quality and quantity of meat their animals produce, not by total weight of a live hog, which is the traditional method.

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• Meadowbrook Farms

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