University of Wisconsin Center for Wisconsin
Rural Cooperatives, Jan./Feb. 1996, pg. 4-5
Published by the Rural Business and Cooperative Development Service
Cooperatives' Share of Farm Marketings Hits 14-Year High
Charles A. Kraenzle
Director, CS Statistics and Technical Services Staff
Editor's Note: Assistance in developing this report was provided
by staff members of the Cooperative Services (CS) program of USDA's Rural
Business-Cooperative Service, including: Dave Cummins, grains and oilseeds;
Eldon Eversull, farm supplies; Andy Jermolowicz, fruits, vegetables and
tobacco; Charles Ling, milk; and Bruce Reynolds, cotton and cottonseed.
US. farmer-owned cooperatives accounted for 31 percent of the nation's crop, livestock and milk sales in 1994, up from 29 percent in 1993. This matches the previous record set in 1975 and last matched in 1980. U.S. cooperatives also sold 29 percent of major farm production supplies nationally in 1994, up from 28 percent in 1993. This too matches the previous record for U.S. market share set in 1979 and equaled in 1992.
Cooperatives sold a record $65.5 billion of farm commodities in 1994, up $4.6 billion from 1993. Cooperatives' share of farm marketings has been trending upward since 1987 (figure 1).
Cooperatives also sold a record $20.8 billion of farm supplies in 1994, $1.6 billion more than in 1993. Their share of farm supply sales trended upward from 1988 to 1992, but appears to have leveled off since then.
"These figures indicate growing marketplace strength for cooperatives at a crucial time in our nation's agricultural history," said Randall Torgerson, CS deputy administrator. "With continued strong performances in key commodity areas, the cooperative sector is poised to attain historic high levels of marketplace penetration in coming years."
Farm Products Marketed
Cooperatives' most dominant market position continues to be in the dairy sector. Co-ops sold 86 percent of U.S. milk purchased at the first-handler level in 1994 and 1993 (table 1). Cooperatives had $21.5 billion in net sales of milk and milk products in 1994, up 4.8 percent from 1993. Cooperatives' share of milk sales includes the value of milk for which cooperatives bargained with processors over price and trade terms.
Helping to boost cooperatives' overall share of farm marketings in 1994 was a major increase in the co-op share of cash receipts for cotton and cottonseed, which jumped from 35 percent in 1993 to 41 percent in 1994. Cooperatives sold nearly $2.5 billion of cotton in 1994, a 28.3 percent increase from 1993, due largely to higher cotton prices.
Cooperatives' share of grains and oilseeds marketing activity was down slightly, from 41 percent in 1993 to 40 percent in 1994. Total U.S. cash receipts for grains and oilseeds increased in 1994 while co-op payments to farmers declined slightly.
Table 1 - Co-ops' share of U.S. farm marketings, selected products, 1992-94
2 Estimates are rounded to the nearest whole number.
3 Includes unprocessed oilseeds other than cottonseed.
4 Includes mohair.
5 Includes poultry and eggs, dry edible beans and peas, nuts, rice, tobacco, sugarcane, sugarbeets, honey, and other miscellaneous marketings.
6 All farm products weighted by value.
Cooperatives sold more than $8.4 billion of fruits and vegetables in 1994, slightly more than in 1993 and about 20 percent of all marketing activity in this sector, unchanged from 1993.
With nearly $6.8 billion in livestock sales in 1994 (up 20 percent from 1993), cooperatives accounted for 13 percent of livestock (including wool and mohair) marketings. That's up from 10 percent in 1993 and the highest level since 1980.
Cooperatives' share of "all other" farm commodities marketed (which includes poultry, nuts, rice, sugar and tobacco) was 13 percent in 1994, up from 11 percent in 1993. Cooperative sales of "all other" crops in 1994 totaled nearly $8.8 billion, 9.9 percent above the $8 billion level in 1993.
Table 2- Co-ops' share of U.S. major farm production expenditures, 1992-94
2 Cooperatives' share of petroleum purchases by farmers in 1993 was revised from 48 percent to 41 percent based on data gathered in a special study by Eversull and Dunn on the vital role that agricultural cooperatives perform in providing petroleum products to farmers and rural America. For more detailed information, see Eversull, E. Eldon and John R. Dunn, Petroleum Cooperatives, 1993, USDA, RBCDS, RBCDS Research Report 143, July 1995.
3 Total for the five groups weighted by value.
Farm Production Expenditures
Cooperatives' 29 percent share of the market for major farm supplies in 1994 was boosted by a major increase in their share of crop protectant sales, which climbed from 31 percent in 1993 to 35 percent in 1994. Smaller gains in market share were also realized by cooperatives for fertilizer and petroleum sales (figure 3). Cooperatives' share of seed sales dropped slightly while their share of feed sales remained unchanged from 1993 (table 2).
Farm supply cooperatives sold $17.8 billion in major farm supplies in 1994 (crop protectants, fertilizer, feed, seed and petroleum), or $20.8 billion when "all other" production supplies (such as tires, batteries, etc.) are included. However, USDA bases its cooperative share calculation only on major farm supplies.
Total U.S. farm expenditures (co-op and non-co-op) for major farm production supplies increased 5.7 percent from 1993 to 1994. Expenditures increased for all supplies except petroleum. Feed expenditures accounted for 45.5 percent of the total. For cooperatives, petroleum accounted for the largest portion, 29.8 percent, of farm supply sales. It was followed by feed, 27 percent, and fertilizer, 25.1 percent.
Methods Used in Developing Co-op Shares
Cooperative-share estimates for selected commodities and farm supplies are based on data collected from the annual survey of farmer cooperatives conducted by USDA's Cooperative Services (CS) program, other CS studies, cash receipts from farm marketings and farm production expenditures published by USDA's Economic Research Service (ERS) and from information supplied by CS commodity specialists.
Cooperatives' share of farm marketings represents estimates of cooperative activity at the farmgate, or first-handler, level. Share estimates for farm production items represent cooperative activity in sales of supplies to farmers. The share estimate for each commodity was based on either physical quantity or dollar volume. In most cases, the share estimates were based on dollar volume.
For those commodities where physical quantities handled by cooperatives were not available, cooperatives' shares of farm marketings and farm production expenditures were estimated by subtracting from net cooperative business volume that business (i.e., margins, business with other firms) not directly involving farmers. The results were estimates of payments to farmers for products marketed and sales of farm production items. Percentage figures were then derived by relating payments to farmers to their respective total U.S. cash receipts, adjusted for crop year, and sales of production items to their respective total U.S. cash expenditures.