This created a strategic advantage over other competing processing plants. Producer agreements between the cooperative and the producer link delivery of products to equity units purchased. Total delivery rights make equal processing capacity available for sale. Purchase of commodities is authorized to cover for undelivered contracts. Shares can be sold to other eligible producers at prices agreed to by the buyers and sellers.
Equity shares appreciate or depreciate in value based on the earnings potential they represent.
Although the cooperative's board doesn't set prices, it must approve all stock transfers so that shares stay in the hands of eligible persons. High levels of cash patronage refunds are issued annually to the producer. Since equity is achieved in advance of business startup, a majority of the net can be returned annually to producers in cash. Dakota Growers Pasta Co. Farmers were not even returning their cost of production.