Dairy co-ops continue dominant
role in marketing nation’s milk

By K. Charles Ling, Ag Economist
USDA Rural Development/ RBS
e-mail: charles.ling@usda.gov


Editor’s note: for a more detailed examination
of topics in this article, see Research
Report 201, “Dairy Cooperative
Operations, 2000” available on our
website, www.rurdev.usda.gov/rbs/pub/
newpub.htm. For a hard copy, call
(202) 720-8381, or e-mail:
dan.campbell@usda.gov.


airy co-ops continue to be the nation’s primary source for milk and dairy products. Data analyzed by USDA Rural Development shows that dairy products represented 33 percent of the value of all products marketed by agricultural cooperatives during 2002. Dairy cooperatives received, or bargained for, 86 percent of all milk sold by farmers (or 83 percent when nonmember milk is subtracted).

The number of dairy cooperatives decreased 13 percent, from 226 to 196, from 1997 to 2002. The number of cooperatives that process milk and manufacture dairy products dropped from 63 to 46 during that same five year period.

More than 61,390 members marketed their milk through the nation’s 194 direct-member dairy cooperatives. Three regions the East North Central, West North Central and North Atlantic together accounted for 84 percent of all member-producers and 52 percent of cooperative milk volume.

Sixty-two percent of total cooperative milk volume was sold as raw milk in 2002, compared to 61 percent in 1997. The other 38 percent was manufactured at plants owned and operated by cooperatives. The number of cooperatives selling raw milk fell from 204 to 174 during this period.

Types of co-op milk plants
Dairy cooperatives operated 209 milk plants in 2002. Of these: Dairy cooperatives also held investments in 75 dairy plants that they did not directly operate. Of these, 52 plants package fluid milk products, 18 process other dairy products and 7 make ice cream. (The production of these plants is not counted as cooperative volume.) Cooperative marketing of butter, dry-milk products and cheese increased from 1997 to 2002.

Cooperatives’ share of butter increased from 61 to 71 percent during the half decade. Their share of dry-milk products (nonfat dry milk, dry-whole milk and dry buttermilk) climbed from 76 to 85 percent. Cooperatives continued to have an overwhelming share of nonfat dry milk, which was 86 percent in 2002, a 5-point increase.

Co-op cheese volume jumps
Cooperatives marketed 17 percent more cheese in 2002 than in 1997, their volume increasing from 2,907 million to 3,402 million pounds. Nationally, overall cheese production also increased 17 percent. Cooperatives’ share of the natural cheese market was unchanged at 40 percent.

Sales of packaged fluid milk products by cooperatives decreased both in volume and in market share. The 3,810 million pounds marketed by coops equaled 7 percent of the nation’s production, down from 14 percent in 1997. Cooperatives sold 9 percent of the nation’s cottage cheese in 2002, down from 10 percent, while their share of ice cream decreased from 6 percent to 3 percent. In 2002, cooperatives marketed 6 percent of the nation’s ice cream mix, 2 percent of yogurt, 53 percent of bulk-condensed milk, 52 percent of dry-whey products, 13 percent of sour cream and 34 percent of condensed buttermilk.

Co-ops mostly small, but growing
Most dairy cooperatives continue to be relatively small business organizations. But through consolidation and growth, an increasing amount of dairy products are being sold by larger cooperatives.

Members of the nation’s eight largest cooperatives marketed 52 percent of the total U.S. volume of milk sold to plants and dealers, up from 42 percent in 1997. Their volume represented 63 percent of member milk marketed through all cooperatives, up from 52 percent. However, their share of dairy products was less significant. The eight largest dairy cooperatives sold only 6 percent of the nation’s packaged fluid milk, 36 percent of cheese and 47 percent of dry whey and dry whey products. They dominated only in marketing butter (with a 67 percent share) and nonfat dry milk (80 percent market share).

Member milk of the four largest cooperatives accounted for 41 percent of U.S. milk sold to plants and dealers and 49 percent of member milk marketed through all cooperatives. Their shares of U.S. production of selected products were: packaged fluid milk products, 5 percent; cheese, 29 percent; dry whey and dry whey products, 34 percent; butter, 56 percent; and nonfat dry milk, 66 percent.



NCFC names California’s Peltier president, CEO

Jean-Mari Peltier has been named president and chief executive officer of the National Council of Farmer Cooperatives (NCFC), a Washington, D.C.-based trade association representing the interests of U.S. agricultural cooperatives. Peltier brings more than 25 years of national and state governmental, agricultural and trade association experience to her new position. Peltier most recently served in the Bush administration as counselor for agricultural policy for the administrator of the Environmental Protection Agency (EPA).

“We were extremely impressed with Ms. Peltier’s career accomplishments, the depth and breadth of her governmental and industry experience, as well as her keen understanding of agricultural policy, trade issues and the business challenges facing U.S. agriculture in general and agricultural cooperatives in particular,” noted Douglas D. Sims, chairman of NCFC’s search committee and CEO of CoBank. “She is uniquely qualified to lead NCFC at a critical time when the needs of NCFC members are changing in a highly competitive and global business environment.”

John E. Gherty, president and chief executive officer of Land O’Lakes Inc. and NCFC board chairman, added, “Ms. Peltier will bring a fresh perspective and dynamic leadership to NCFC. She has a passion for agriculture and a strong commitment to the future success of agricultural cooperatives.”

“I’m enthused to devote my energy and experience to serving this country’s farmer cooperatives,” says Peltier, who began her NCFC duties Feb. 1. “This is not new ground for me. I have been associated with agricultural cooperatives for most of my career. I am looking forward to working with my colleagues here in Washington and with the agricultural business leaders across the nation.”

Prior to her appointment with EPA, Peltier held a number of executive-level positions in the California agricultural industry and state government, including president of the California Citrus Quality Council, executive director of the California Pear Advisory Board, president of the California Pear Growers (a farmer-owned bargaining cooperative), and director of public and government relations for the California Grape and Tree Fruit League.

In addition, Peltier served as chief deputy director of the Department of Pesticide Regulation for the California EPA, senior policy specialist for the California State World Trade Commission under Governor George Deukmejian, and as a legislative assistant for Congressman Tony Coelho.

A native Californian and graduate of Fresno State University, Peltier also has served as a director or board officer for a wide range of agricultural and trade organizations, including the Coalition for Urban/Rural Environmental Stewardship, Minor Crops Farmer Alliance, Future Farmers of America Foundation, Agricultural Technical Advisory Committee on Trade, Agricultural Council of California, and Capital Agri-Women.

There are nearly 3,000 farmer cooperatives across the United States, whose members include a majority of our nation’s more than 2 million farmers, ranchers and growers. Farmer cooperatives also provide jobs for nearly 300,000 Americans, many in rural areas, with a combined payroll of over $8 billion.

Additional information about NCFC can be found at www.ncfc.org.




March/April Table of Contents