Farmer cooperative sales,
income fall in 2002
By Eldon Eversull, Ag Economist
USDA Rural Development/RBS
espite sales gains in the
livestock and cotton sectors,
final sales data for
2002 shows that net
business volume for the
nation’s 3,140 farmer-owned cooperatives
fell to $96.8 billion, with a net
income of $1.21 billion. With assets
totaling $47 billion and almost $20 billion
in equity, farmer cooperatives continued
to be a major employer in rural
areas, with 166,000 full-time workers
and 54,000 part-time and seasonal
workers.
U.S. farmers overall had increased
sales of products that they produced in
2002, but many farmer-owned cooperatives
experienced lower sales and
incomes. There are a number of reasons
why cooperative sales and income
do not strictly follow national farm
trends. The fiscal year for about half of
cooperatives ends in June or earlier,
meaning that most of their sales are
from the prior year while farm production
trends are based on calendar
years. Further, many cooperatives sell
value-added products that do not necessarily
reflect raw commodity prices.
Cooperative marketings declined in
all sectors in 2002, except for livestock
and poultry, which increased $600 million
(4.5 percent), and cotton, which
climbed $100 million (2.5 percent).
Low milk prices caused dairy co-op
sales to drop while several larger fruit
and vegetable co-ops had much lower
sales. Overall, almost all of the decline
in sales occurred on the marketing side,
falling about 7.2 percent from 2001.
Net business volume includes
receipts from the sale of crops, livestock
and value-added products marketed
by cooperatives, as well as farm
production supplies sold and services
provided by cooperatives. It does not
include sales between cooperatives.
Farm production supply sales fell
4.4 percent due to large decreases in
petroleum and fertilizer sales. On the
plus side, livestock feed and seed sales
both increased, with feed sales growing
by $1.4 billion.
Net income for cooperatives fell
from $1.4 billion to $1.2 billion. Sales
were lower in each of the three primary
sectors USDA tracks: crop and livestock
marketing (including value-added
goods), farm supplies and farm services.
Several types of marketing cooperatives
bucked the downward trend,
reporting higher net income in 2002.
After posting almost no income in
2001, rice cooperatives were back to
historically high levels, with net income
of $6.6 million. Cotton cooperatives’
net income almost tripled from 2001, to
$89.6 million, while grain and oilseed
cooperatives had a 4 percent increase.
Farmer-owned cooperatives had
combined assets of $47.5 billion in
2002, and net worth of $19.6 billion.
Cooperatives financed about the same
percentage of assets with debt capital
(58.7 percent in 2002 vs. 58.4 in 2001)
rather than equity.
The number of cooperatives
declined to 3,140 in 2002, down from
3,229 in 2001 and 3,346 in 2000. The
main causes were mergers, consolidations,
acquisitions and dissolutions.
Memberships in farmer cooperatives
totaled 2.8 million in 2002, down
from 3 million in 2001. The number
of memberships is larger than the
number of farmers in the United
States because many farmers belong to
more than one cooperative.
Co-op data is generated by USDA
Rural Development’s annual survey of
cooperatives.
