By Bill Pardee, OCC Board President
The OCC Board studies to prepare itself to act wisely as circumstances change. At the July Board meeting, as part of that continuing process, Board Member, Jon Jensen, organized and moderated a panel discussion entitled, “Energy, Sustainability and the Co-op.”
Panelists Chris Blanchard, local certified organic grower, Jim Martin-Schramm, Luther professor and expert on energy issues, and Kristin Evenrud, Co-op Grocery and Meat manager, contributed. All seven Board members, General Manager David Lester, and half a dozen member-owners participated.
Chris Blanchard exports his certified organic produce to the Twin Cities and Chicago. He urged more growers to export. Chris argued that Winneshiek County is too small a market to support a scale of production necessary to afford the equipment, such as large on-farm coolers, needed to produce top quality produce. Big California growers can sell cosmetically unappealing produce occasionally, but a small grower cannot. “If it’s ugly, people won’t buy it.”
The prolonged recession has reduced sales somewhat. Increasingly common extreme weather events, such as heat, the long, cold spring this year, and floods (2007 and 2008) all hurt. Disease and weeds also cut into profitability.
Chris urged the Co-op to apply a higher markup to non-local foods that compete directly with local foods. He urged the Co-op to label and support local certified organic food.
Jim Martin-Schramm explained that 85% of our U.S. energy supply is from fossil fuels with the remaining 15% from nuclear and renewables. By 2020, he said the fossil fuel fraction may decline to 75%. Many believe conventional petroleum production has already peaked. There may be 125 years of coal that is feasible to extract. The Energy Information Agency believes that our natural gas reserves will increase for another 20 years. Twenty percent of Iowa generated electricity, however, is wind energy.
Professor Schramm noted that US citizens are extraordinarily wasteful of energy compared to Europe or Japan, which have comparable living standards.
He held out the hope that tax reform may result in a tax on carbon because many conservatives would like to transfer taxes on income to taxes on consumption.
He told us that Alliant foresees 10% increases in the cost of electric energy every year for the next ten years. Jim urged the Co-op to invest in efficiency.
Jim expects more frequent severe power outages from weather events.
David Lester mentioned that the Co-op is one of very few energy star rated grocery stores. The store is energy efficient in part because of the comparatively low fraction of frozen and refrigerated foods. It has relatively more fresh produce and bulk foods.
Kristin Evenrud explained the complexities of buying for the Co-op. We have an advantageous volume discount with United Natural Foods Incorporated (UNFI), our primary supplier, because of our membership in the National Cooperative Grocers Association (NCGA). Buying from them, however, reduces our options. UNFI has announced a significant price increase, which they ascribe to diesel fuel costs and world-wide shortages of grains, sugars, other sweeteners and proteins. Some of the shortages are ascribed to weather events, and though controversial, some to the conversion of food crops to ethanol.
Steve McCargar recommended that the Co-op consider strategic changes including: (a) Vertical integration of coops, (b) Loosening coop dependence on monopolies like UNFI, (c) Purchasing directly from producers, (d) Encouraging regional value-added capacities (canning, cheese making, …)
Kristin explained some of the barriers to buying walnuts from a Missouri farmer (large quantity needed to make transportation affordable) and organically grown trout from Viroqua (simply not popular with our members and customers).
Member-owner Rob Fisher suggested creation of a “mutual fund” to enable local residents to invest in regional sustainability projects.
These learning sessions usually don’t seek a specific conclusion, but rather try to develop among board members and, when possible, member owners, shared understanding of potential challenges.