The Dexter Co-op
Author: Grace Shackman
The rise and fall of a radical idea
In 1919 a group of Dexter-area farmers did something radical. One story says they did it because a Detroit buyer bragged about how much money he was making off them. Another story says that Hoey and Sons Lumber and Coal Company brought it on by charging too much for necessities like feed, grain, and hardware. "Farmers were at a disadvantage dealing one-on-one with packing companies, grain dealers," says Carl Lesser.
In November of that year, about fifty farmers, including Lessor's grandfather, met at the Dexter Opera House and agreed to put in $50 apiece—a tidy sum in those days—to start the Dexter Agriculture Association. Each also pledged an additional $50. "It was just a group of farmers who decided they should be able to buy cheaper and sell for a better price," says Bob Mast, a second-generation member.
In those days, co-ops were relatively new and controversial. The large companies that served as middlemen between farmers and consumers had tried to invoke the 1890 Sherman Antitrust Act to have co-ops declared illegal, even though the act was passed to prevent business monopolies. A 1914 law, the Clayton Act, legalized co-ops but did not define their powers. In 1922 Congress finally spelled out, in the Capper-Volstead Act, that farmers could lawfully unite to collectively process, handle, and market their products.
The Dexter group bought an old house and five lots on a triangle of land bounded by Central Street, Third Street, and the Michigan Central Railroad tracks. It was an excellent location: at the time, the railroad was the main way to ship farm produce and get farm supplies. The co-op opened for business on January 1, 1920. Within two months it had ninety-four members.
The association, renamed the Dexter Co-op in 1927, sold supplies to members at low markups and helped them sell their own products. The co-op converted the old house into a feed production area, mainly for pigs, chickens, and cows. The farmers brought in grain they'd grown, such as oats or corn; ground it in the basement; and then took it upstairs to be mixed with a concentrate. Also upstairs, co-op employees shelled corn. These services were so much in demand at harvest time that farmers lined up from dawn to dark waiting.
The co-op bought a large scale (for a time the only one in the area) and placed it near the house, protecting it with a drive-through shelter. Lesser remembers accompanying his father in a horse-drawn wagon when he brought in loads of hay. "The building was so small it was hard to get the hay in," he recalls. "We had to push it in. We must have lost a lot." The co-op's bookkeeper had only to look out the window of the attached office to record the weight.
To store and ship cash crops, the co-op leased a grain elevator, freight house, and loading dock from the railroad. All of them were flush with the tracks for easy loading. (Wheat was then the biggest cash crop, and most of it was sold to flour mills in the area.) When carloads of incoming supplies such as lumber and coal arrived, they were stored until unloaded on a spur of track in the co-op grounds. As the co-op became more successful, it offered an expanding range of items, from flour and salt to Portland cement, fencing, and twine.
The secret of its success, according to Lesser, was its ability to buy products so cheaply that it could sell competitively and still make enough to cover its operating costs. Buying from other co-ops and from organizations such as the National Farmers Group and the State Farm Bureau allowed the co-op to obtain cattle feed and fertilizer at very low prices. For a few years the Dexter Co-op even sold farm machinery produced by a co-op in Lansing.
The board of directors hired a manager for day-to-day operations. The membership of the co-op met yearly at a big dinner, usually held at either the Masonic Temple or St. Andrew's Church. The meeting included a financial report, election of board members and officers, and a speaker on an agricultural topic.
The people who originally bought shares in the co-op were common stockholders. Common shares, .much in demand because they earned more than bank accounts did, were rarely available. Anyone could be a "preferred stockholder" just by doing business with the co-op. At the end of the year, the customers shared in the year's profits according to how much they bought.
The co-op did well during the Depression and outgrew its facilities. In 1940 it broke ground for a new vitrified-tile building, which the Dexter Mill still uses. To celebrate the building's grand opening on March 8, 1941, the co-op cooked up 100 pounds of free hot dogs and gave away door prizes—knives, pencils, baby chicks. The co-op now had room to stock more agricultural supplies and add new products, such as building materials, hardware, dishes, and kitchen cabinets.
In 1949 a big fire destroyed the wooden grain elevator. The co-op built a new, fire-resistant elevator and a new feed mill where the old house had stood. But the new setup couldn't save the co-op from a decline in family agriculture and a dwindling commitment to the co-op concept. "It was loyalty that kept it going," says Lesser. "The first generation knew the reason for the organization." Later generations were less loyal and more mobile: as farmers got big trucks, they could travel farther and do business for-profit companies that, because of greater volume, could offer lower prices than the co-op did. As the co-op's business declined, it had to buy in smaller volumes, and its prices rose.
In 1969 the co-op board sold the business to Washtenaw Farm and Garden Center, which was leaving its Ann Arbor store in what is now Kerrytown. On March 22, 1980, after the Farm and Garden Center finished paying off its land contract, the co-op held its last meeting to pay off stockholders and close the books. With the help of his wife, Thelma, Bob Mast, who was the last treasurer, was able to find a large number of the original stockholders or their heirs. The co-op made enough from the sale, plus the accumulated interest, to pay $10 a share—the original face value of the stock. "Very few co-ops could do that," says Mast.
John Cares, an agriculture graduate of Michigan State, now runs the Dexter Mill in the old co-op buildings. Cares provides many of the same services the co-op did, making feed, and sells many of the same supplies, such as fertilizer. As full-time farming continues to decline, more of his customers these days are gentlemen farmers or suburbanites with small gardens.
Every now and then people come into the Dexter Mill with old co-op stock certificates, maybe found in Grandpa's attic, and try to redeem them. Cares refers those customers to Mast, who says, "There's not much I can do about it. I tell them to put it on the wall and look at it."
Today, the Dexter Mill provides many of the same products and services that the Dexter Co-op did through the 1960s.