Farmer co-ops report record net income
Editor’s note: Information for this article was compiled by the
Statistics Staff of USDA Rural Development’s Cooperative
Programs, including Katherine C. DeVille, Jacqueline E. Penn
and E. Eldon Eversull.
armer cooperatives reported more than $2.5
billion in pre-tax net income for 2005, a new
record and an increase of 130 percent from
2003, when USDA last surveyed farmer
cooperatives. Net revenue from sales and
services was $106.4 billion in 2005, the highest level since
1997 and up 6 percent from 2003. Revenue 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 supply sales – buoyed by higher petroleum prices –
led the way, climbing 11 percent from 2003. Crop and
livestock marketing by cooperatives also climbed 1 percent
from the previous year. Service sales fell about 5 percent
(table 1).
Gross sales (which includes co-op to co-op sales) increased
to $121 billion, compared to $117 billion in 2003. The gain
was remarkable, given the bankruptcies of two large farmer
cooperatives in 2003 and the conversion of a large poultry
cooperative in 2004. A large farm supply cooperative was also
converted to an investor-owned firm in 2005.
Equity capital fell by about $900 million, and remained
low at 42 percent of all assets. Cooperative assets fell by $300
million as liabilities grew $600 million, lowering equity by
more than 4 percent.
Patronage refunds rebounded from $92 million in 2003
(the lowest since 1987) to $400 million in 2005, which is
close to the modern average (figure 2).
Farmer cooperatives remain one of the largest employers
in many rural communities, with more than 180,000 workers
nationwide. However, employment fell
by 46,000 due to the aforementioned
loss of four large farmer cooperatives.
Farm numbers continue to drop, as
do memberships and farmer
cooperatives. Cooperative memberships
declined to 2.6 million, or about 7
percent from 2003. Many farmers are
members of more than one cooperative,
hence cooperative memberships exceed
U.S. farm numbers. There are now
2,896 farmer cooperatives, down from
3,086 in 2003.
