Net business volume, net income for farmer co-ops decline in 1998
Editor's Note: Information for this article was compiled by the Statistics Staff of USDA's Rural Business-Cooperative Services, including Charles A. Kraenzle, Celestine C. Adams, Katherine C. DeVille, Jacqueline E. Penn and Ralph M. Richardson
Business volume of the nation's
farmer-owned cooperatives declined to $104.4 billion in 1998, down from $106.7
billion in 1997, according to data compiled by USDA's Rural Business-Cooperative
Service. Business volume includes gross receipts from the sale of crops,
livestock, farm supplies and services collected by the nation's 3,651 farmer
cooperatives.
Farmer cooperatives' net income of
$1.7 billion in 1998 was down from $2.3 billion in 1997. That's the lowest
income level since 1993 and well off the income record of $2.36 billion set in
1995. Lower margins for farm supplies, poultry and sugar were major factors that
caused the income decline. Losses suffered by a number of cooperatives also hurt
the overall income performance.
Crop and livestock marketing receipts
dropped 1.5 percent, farm supply sales declined 3.8 percent and set-vice
receipts and other income fell 3.5 percent in 1998. Among the major products
marketed, grain and oilseed dollar volume dropped the most (13.6 percent),
largely due to significantly lower prices.
The drop in farm supply sales was due
mainly to lower prices for livestock feed, petroleum and fertilizer. Feed sale
receipts alone dropped 10.4 percent from 1997. The drop in farm supply sales, as
well as the lower margins, also had a significant impact on earnings of farm
supply cooperatives. Net income of $578.8 million was down nearly 31 percent.
Farm marketing cooperatives those
that sell crops, livestock and value-added products for their members - also
suffered a steep 22.5 percent decline in net income. Fruit/vegetable, poultry
and sugar cooperatives all suffered significant income drops. Bucking the trend
were dairy co-ops, which posted a 2 1 -percent income gain. Net income for grain
and oilseed cooperatives increased 1 percent despite substantially smaller sales
volumes.
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Co-ops reflect farmer trends
Cooperatives continued to expand
as reflected by total assets reaching a record $46.5 billion in 1998, an
increase of 5.8 percent from nearly $44 billion in 1997. To finance this
expansion, total liabilities also grew to $26.6 billion from $25.5 billion, a
4.5 percent increase. More importantly, however, a larger proportion of total
assets were financed by net worth as it jumped to nearly $20 billion from $18.5
billion, an increase of 7.6 percent.
The number of U.S. agricultural
cooperatives dropped to 3,651, down from 3,791 in 1997, reflecting the changing
structure of agriculture. Mergers, consolidations, acquisitions and dissolutions
resulted in a loss of 195 cooperatives. However, 55 cooperatives were added to
the list in 1998.
Membership in farmer cooperatives
totaled 3.35 million in 1998, down 2.1 percent from 1997. The number of
memberships was larger than the number of farmers in the U.S. because many
farmers belong to more than one cooperative.
Cooperatives employed 173,782 full-time employees in 1998, up from 172,199 in 1997.
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Farmland, Cenex-Harvest States Top NCB's list
Two agricultural organizations that recently announced plans
to consolidate operations top the list of the largest U.S. cooperatives,
published by the National Cooperative Bank (NCB), Washington, D.C. The
annual list recognizes America's top 100 cooperatives with annual revenues
greater than $325 million.
Farmland Industries, with 1998
revenues of nearly $8.8 billion, and Cenex Harvest States, with nearly $8
billion in 1998 revenues, were the largest agricultural cooperatives in the
Co-op 100 list. In addition, the two organizations are the largest
cooperatives in the United States.
Consolidation among agricultural
cooperatives was a major trend in 1998. Nine of the agriculture
cooperatives listed in last year's report were partners in mergers with four of
the top 100 cooperatives, notes the NCB report. Agriculture remains the
dominant industry sector in the NCB list, represented by 42 cooperatives with
combined revenues of $60 billion, compared to 49 ag cooperatives with $57
billion on the 1997 list.
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