Perspectives in Cooperative Finance

CROPP Mission

The purpose of the Cooperative Regions of Organic Producer Pools is to create and operate a marketing cooperative that promotes regional farm diversity and economic stability by the means of organic agricultural methods and the sale of certified organic products

CROPP Goals

One: Cooperatively market certified organic products produced by our members.

Two: Market the best tasting, most nutritious and wholesome food as possible.

Three: Establish farmer determined food prices to reflect fair return and to use these prices to guide the cooperative marketing.

Four: Encourage a farming future emphasizing ecological and economic sustainability.

Five: Enable a healthy human livelihood by providing quality employment, cooperation, organic education, and community growth.

Six: Practice environmental awareness and cooperative principles in all aspects of production, handling, marketing, and operations.

Seven: Promote a respect for the diversity, dignity and interdependence of human, animal, plant, soil, and global life.

1,051Dairy

Soy

Juice

Produc

e

Egg

Beef

Pork

Poultry

Grower

127

87

PRODUCER REGIONS

Northwest

California

Mountain

Midwest

South Central

Great Lakes

Northeast

Southeast

AS OF 02/2009

1,332

12

14

126

80

179

27

2

FAMILY

FARMS STRONG

48 8 11

2 21 2712

270 109

7108

44

103 1

34 22

5 3 1

1

1 21 1

1

2

2

13

30

25 1

17

5

2

121

6

14

4

1

26

5

124

88

86 794 671 3

3

3

2

9

1

1

1

22

1

1

1

1

4

3

1

31

1

3

1

2

Record Sales

2008 2007 2006 Sales $527,831,009 $432,635,067 $ 333,573,018

Sales Increase $ 95,195,942 $99,062,049 $ 91,145,154

Growth 22% 30% 38%

Historical Financials

2009 Financials

Projected Sales and ProfitsFor the Year Ended December 31

2009 2008 Projected Actual

Sales $527,377,164 $527,831,009

Equity

June 2009 2008 2007

Equity $59,699,486 $56,849,820 $43,772,546

Equity to Asset Ratio 46% 41% 39%Goal is 40%

CROPP Cooperative StockMember stock:

•Class A Common, one voting share for each member

•Class B Preferred – required equity of membership- Capital Base Plan

Investor stock:

•Class E, Series 1 Preferred – available to anyone living in a state in which we are selling -pays 6% annual dividend

Farmer Capital Base Plan

Class B Preferred Stock

• Required investment by farmers.

• Equivalent to 5.5% of the value of their annual deliveries.

• May only be owned by members.

Class E Series 1 Preferred Stock

• Open to investors in 28 states and D.C.• Minimum Investment $5,000.• Senior equity instrument.• 6% annual dividend, fixed rate, paid quarterly.• Dividend payment can be reinvested or taken in

a cash payment.• Quarterly investment statement

Class E Series 1 Preferred Stock

• Over $25 million in sales

• 1,517 investors from 26 states and D.C.

• $40.0 million authorized thru December 2010

Equity MixJune 30, 2009

Unallocated Farmer, 19%

Farmer Capital Programs, 36%

Outside Equity, 45%

CROPP’s valuation?

• $500 million?

•$1 billion??

•$2 billion???

Who does CROPP serve?

• Professional farmers

• Today’s farmers

• Tomorrow’s farmers

Equity = IndependenceIndependence = Farmer

Control

Farmer Control=Following the Mission