University of Wisconsin Center for Cooperatives
Rural Cooperatives, March/April 1997, pp. 37-39
Published by the Rural Business and Cooperative Development Service
Co-ops Set Commodities Market-Share Record
Charles A. Kraenzle
Editor's Note: Assistance in developing estimates of cooperatives'
shares of farm marketings and farm production expenditures was provided
by staff members of the Rural Business-Cooperative Service of USDA Rural
Development: Dave Cummins, grains and oilseeds; Eldon Eversull, farm supplies;
Andy Jermolowicz, fruits and vegetables and tobacco; Charles Ling, milk;
and Bruce Reynolds, cotton and cottonseed.
Nearly one out of every three dollars received by farmers for their agricultural commodities in 1995 came from a farmerowned cooperative. Cooperatives' share of the nation's total farm commodity marketings—including crop, livestock and dairy—was a record 32 percent in 1995. The previous record was 31 percent, set in 1975 and again equaled in 1980 and 1994. As recently as 1993, co-ops marketed 29 percent of the nation's farm output.
This market share was based on a record $69.3 billion worth of farm commodities sold by co-ops in 1995, up $3.8 billion from 1994.
U.S. cooperatives sold a record $21.2 billion worth of farm supplies in 1995, up $400 million from the previous high in 1994. However, they lost market share, from 29 percent of the farm supplies marketed in 1994 to 27 percent in 1995. The 2.1-percent increase in business volume by farm supply co-ops did not keep pace with the 7.8-percent increase in supply purchases made by farmers in 1995.
As shown in figure 1, cooperatives' share of major farm supply items in 1995 equaled that reported in the mid-1980s.
Dominating the Dairy Sector
The dairy sector continues to be the commodity sector in which farmer cooperatives are most dominant. Co-ops' share of total U.S. milk purchased at the first handler level was 88 percent in 1995, up from 86 percent in 1994 (table 1). Cooperatives' net sales of milk and milk products totaled $21.8 billion in 1995, up $280 million, or 1.3 percent, from 1994.
Table 1—Cooperatives' share of U.S. farm marketings, by selected commodity group, 1993-95
1 Estimates are rounded to the nearest whole percent.
2 Includes oilseeds other than cottonseed.
3 Includes mohair.
4 Includes poultry and eggs, dry edible beans and peas, nuts, rice, tobacco, sugarcane, sugarbeets, honey, and other miscellaneous marketings.
5 All farm commodities weighted by value.
Table 2—Cooperatives' shares of U.S. major farm production expenditures, 1993-95
2 The five farm production items weighted by value.
However, farm cash receipts for milk and milk products were about the same in 1995 and 1994 due to lower milk prices in 1995. Co-ops' share of milk sales at the first-handler level includes the value of milk where cooperatives bargained with processors over price and terms of trade for members.
Increases in milk, grain/oilseed and fruit/vegetable shares more than offset decreases in cooperatives' shares of cotton and cottonseed, livestock and wool and "all other" marketings.
Co-ops' share of cotton cash receipts decreased from 41 percent in 1994 to 37 percent in 1995. Although cotton production for the 1994 crop year was up nearly 22 percent, co-ops' cotton business volume of $2.8 billion in 1995 was only up $340 million, or 13.9 percent, from 1994.
Co-ops'grain/oilseed market share was up slightly in 1995, even though the proportion of their total purchases of grains and oilseeds acquired from other firms continued to increase. These purchases, however, are not included in calculating market share. Co-ops' net grain/oilseed business volume was up 13 percent, while total U.S. cash receipts from grain/oilseed sales was up 7.8 percent from 1994 to 1995.
Cooperatives accounted for 23 percent of the nation's fruit/vegetable sales in 1995, up from 20 percent in 1994. Cooperatives sold more than $9.3 billion of fruits and vegetables in 1995, an $800 million, or 9.9 percent, increase from 1994. Total U.S. farm cash receipts for fruits and vegetables was up 4.3 percent.
Cooperatives' share of livestock (including wool and mohair) marketings was 12 percent in 1995, down from 13 percent in 1994. Cooperatives' livestock sales hit $6.5 billion in 1995, down $300 million, or 4.6 percent. Total U.S. cash receipts for livestock dropped 4.2 percent from 1994 to 1995.
Cooperatives' share of "all other" marketings such as poultry, nuts, rice, and sugar, was 12 percent, down from 13 percent in 1994, but up from 11 percent in 1993 (table 1). Cooperatives' "all other" marketings in 1995 totaled more than $9.1 billion, a 4.1-percent increase from the $8.8 billion marketed in 1994. Total U.S. cash receipts for "all other" marketings increased 5.1 percent.
Figure 2 shows recent market share trends for selected farm commodities marketed by farmer cooperatives. Milk, fruit/vegetable and livestock/wool shares show a slight upward trend. Cotton and cottonseed and grain/oilseed shares were fairly flat.
Farm Production Expenditures
Cooperatives lost market share for purchases by farmers of all major farm supplies, except for seed, where there was no change (figure 3). Farm cash expenditures for these supply items increased 7.5 percent from 1994 to 1995, while co-ops' sales increased 2.1 percent. Co-ops maintained their largest share of supply markets in fertilizer (43 percent) and petroleum (39 percent). Their smallest share was in seed (table 2).
Cooperatives' sales of major farm supplies totaled $18.1 billion in 1995. Fertilizer sales were up 5.3 percent and feed sales were up 4.7 percent. Petroleum sales decreased 1.8 percent while seed sales sagged 4.1 percent.
Petroleum accounted for the largest proportion
of farm supply sales, 28.7 per
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 by USDA's Cooperative Services program, from other Cooperative Services studies, cash receipts from farm marketings, and farm production expenditures published by USDA's Economic Research Service (ERS). Information supplied by USDA Cooperative Services' commodity specialists is also used.
Co-ops' shares of farm marketings represent 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 quantities (where available) or dollar volume. In most cases, the share estimate was based on dollar volume.
For those commodities where physical quantities handled by cooperatives were not available, cooperatives' shares of farm marketings were estimated by first subtracting gross margins from net cooperative business volume. These estimated "payments to farmers" were then compared with their respective total U.S. cash receipts (adjusted for crop year) to calculate the percentage share figures.
Shares of the major farm supply items were
estimated by first subtracting from co-ops' net business volume the
volume of business exported, sold to other firms and used for
non-farm purposes. These adjusted business volumes were then compared
with their respective total U.S. cash expenditures, to calculate
the percentage share estimates.
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