One Juicy Rationalization

When anyone discusses the challenges that cooperatives have with redeeming allocated equity, the opposing argument is "don't worry about redemptions; agricultural producers are more interested in price and service than in equity redemptions".

Here is one of the biggest, most juicy rationalizations pushed along by many in the co-op community.  

Every holder of allocated equity who is interested in price and service today will eventually jettison their concern with price and service and become interested in redemption of their allocated equity when they retire or eventually pass away.  

Hence, cooperatives (most particularly centralized cooperatives whose members are natural persons with finite lives) must be simultaneously concerned with price and service AND equity redemptions.

In fact, look at any established cooperative and you will see that the mix of stakeholders includes younger patrons who are currently doing business with the cooperative and are interested in price and service.  And you will see older patrons who are less interested in price and service and increasingly interested in equity redemptions.  And you will also see retired patrons who are no longer interested in price and service but are now focused on the redemption of their allocated equity.  The board of directors responsibilities encompass all of these stakeholder subsets.