Lower commodity prices cause drop in co-op sales
Farmer-owned co-op assets hit record $47.7 billion
Editor's note: Information for this article was compiled by the statistics staff of the Rural Business-Cooperative Service, a division of USDA Rural Development:
Charles A. Kraenzle, Celestine C. Adams, Katherine C. DeVille, Jacqueline E. Penn and Ralph M. Richardson.
he nation's farmer-owned cooperatives experienced a drop in both sales and income in 1999, reflecting a general, 9 percent
downturn in farm commodity values. However, cooperatives' combined total assets reached a record-high $47.7 billion, 2.4 percent ($1.1 billion) more than in 1998. The 3,469 farmer cooperatives surveyed by USDA account for nearly one-third of U.S. farm output and farm supply sales. Total cooperative business which includes receipts from the sale of crops, livestock, farm supplies and services was $100.1 billion in 1999, down 4.4 percent from $104.7 billion in 1998 (table 1).
A 19.2 percent (or $4.1 billion) decline in the value of grains and oilseeds marketed and sharp drops in feed and fertilizer prices were among the major causes for the decrease. Cooperative provided services (such as cotton ginning, livestock breeding, trucking, etc.) and miscellaneous income was a bright spot in the sales picture, rising an impressive 12.1 percent, to nearly $3.9 billion. Dairy
co-ops also bucked the downtrend, with a 3.8 percent gain in sales to $26.3 billion in 1999. Also posting an increase were fruit and vegetable co-ops, up 3.4 percent to $9.7 billion.
Co-ops realized $72.7 billion from marketing farm commodities (selling, bargaining for and/or processing members' crops and livestock) and $23.5 billion from the sale of farm supplies (including fertilizer, crop protectants, seed, feed, etc.).
Total net income of $1.4 billion for farmer cooperatives in 1999 was down 19.8 percent from $1.7 billion in 1998 (table 2) the lowest level since 1993 and well under the record of $2.36 billion set in 1995, according to data compiled by the Rural Business-Cooperative Service of USDA Rural Development. Cooperatives earned $940.6 million in net income from marketing farm commodities and value-added goods in 1999, a decline of 7.6 percent; they earned $350.5 million from farm supply sales, 39.4 percent less than in 1998.
The number of U.S. farmer-owned cooperatives dropped to 3,469, down from 3,651 in 1998, reflecting the ongoing trend of mergers, consolidations, acquisitions and dissolutions.
Memberships in farmer cooperatives totaled 3.19 million in 1999, down 4.8 percent from 1998. The number of memberships is larger than the number of farms (about 2 million) because many farmers belong to more than one cooperative.
Agricultural cooperatives are major sources of jobs in both rural and urban areas, employing 172,814 full-time workers in 1999.
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