News Release

Contact: Dan Campbell, (202) 720-6483

FARM CO-OP BUSINESS VOLUME STABLE IN 2000

     WASHINGTON, August 31, 2001--Business volume of the nation's farmer-owned cooperatives was $99.1 billion in 2000, virtually unchanged from 1999 despite low commodity prices in many agricultural sectors, the U.S. Department of Agriculture announced today. Farm supply sales by cooperatives increased in 2000, but those gains were offset by small declines in the marketing of crops and livestock. Receipts for services provided by cooperatives to farmers also declined slightly.

     Business volume includes receipts from the sale of crops, livestock, farm supplies and services provided by the nation's 3,345 farmer-owned cooperatives.

     Lower average farm milk price (down 13.8 percent from 1999) was a major factor for the slight (0.6 percent) drop in overall sales value by all types of farm marketing cooperatives. Milk and milk product sales fell $3.3 billion (12.6 percent) from 1999. However, sales volume by cooperatives of all other commodities (except rice) increased, paced by a $1.3 billion-increase in the sale of grains and oilseeds.

     Farm supply sales climbed 3.8 percent, due mainly to higher prices for petroleum. Petroleum sales increased nearly $1.2 billion, or 18.5 percent. Seed sales were up nearly $0.2 billion, or 21.7 percent. Sales declined for feed, fertilizer and "other" supplies.

     Net income (or earnings) for cooperatives dropped to $1.27 billion in 2000, down from $1.33 billion in 1999. This was the lowest net income reported since 1986, according to records kept by USDA Rural Development's Rural Business-Cooperative Service (RBS). The record for net income by cooperatives was $2.36 billion in 1995. Net income dropped $12.3 million (1.4 percent) for marketing co-ops, despite a 19.3 percent increase for dairy cooperatives, which saw earnings climb from $276.6 million in 1999 to $330 million in 2000. That gain was offset by lower net income for grain/oilseed cooperatives, which saw earnings drop from $324.5 million to $275.1 million during the same period. Livestock, poultry and sugar co-ops reported losses.

     Supply cooperatives reported a $40.2 million (11.4 percent) drop in net income. "Related-service" cooperatives (those that perform services such as fertilizer and chemical application or livestock breeding) saw income drop by $8.3 million (7.9 percent).

     Combined assets of farmer-owned cooperatives reached $49.7 billion in 2000, up $2 billion (4.2 percent) from 1999. Net worth of $20.3 billion was about the same as in 1999, which means cooperatives financed more assets with debt capital rather than equity.

     The number of U.S. farm cooperatives dropped to 3,345, down from 3,466 in 1999, or 3.5 percent. Mergers, consolidations, acquisitions and dissolutions resulted in a reduction of 164 cooperatives. However, 43 cooperatives were added to USDA's list in 2000.

     Memberships in farmer cooperatives totaled 3.08 million in 2000, down 3.1 percent from 1999. The number of memberships continued to be larger than the number of farmers in the United States because many farmers belong to more than one cooperative.

     USDA Rural Development serves as the lead federal entity for rural development needs, and administers program assistance through three agencies: Rural Housing Service, Rural Business-Cooperative Service, and Rural Utilities Service. Further information on USDA Rural Development can be obtained by contacting any USDA Service Center or by visiting USDA's web site at http://www.rurdev.usda.gov.

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Farmer Cooperatives' Net Business Volume and Income for 1999 and 2000
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