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
Director, cooperative services statistics Staff
USDA Rural Development/Rural Business Cooperaitve service

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.

Co-ops share of U.S. farm marketing marketings and farm production expenditures

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
Commodity group
1995
1994
1993
Percent of U. S. cash receipts 1
Milk and products
88
86
86
Cotton and cottonseed
37
41
35
Grains and oilseeds 2
41
40
41
Fruits and vegetables
23
20
20
Livestock and wool 3 
12
13
10
All other 4 
12
13
11
Total 5
32
31
29
 
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
Farm production item
1995
1994
1993
Percent of U.S. farm production expenditures 1
Fertilizer
43
45
42
Petroleum
39
42
41
Crop protectants
33
35
31
Feed
20
21
21
Seed
11
11
12
Total 2
27
29
28
1 Estimates are rounded to the nearest whole percent.
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.

Co-ops' shares of U.S. farm products marketed

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).

Co-ops shares of U.S. farm production supplies

    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
cent, followed by feed, 27.7 percent, and  fertilizer, 25.9 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 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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