Release No. 0261.97 Jim Brownlee (202) 720-2091 Dan Campbell (202) 720-6483 FARMER CO-OPS CONTINUE TO BREAK INCOME AND SALES RECORDS PITTSBURGH, PENN., Aug. 5, 1997--Farmer-owned cooperatives in the United States have set new business volume and net income records for the second consecutive year. Agriculture Under Secretary for Rural Development, Jill Long Thompson, speaking to cooperative leaders from around the nation, today announced that the nation's 3,884 farmer cooperatives reported record net business volume of $106 billion for 1996, a 13 percent increase from the previous record of $94 billion set in 1995. Cooperatives also enjoyed record net income of $2.37 billion, up from $2.33 billion in 1995. "For more than 100 years, cooperatives have played a vital role in helping farmers improve their ability to market and process their crops and livestock and to secure farm supplies and other services at reasonable costs," Long Thompson said. "These new sales and income records show that the cooperative form of business is alive and well in our nation's rural communities." The record business volume year for the nation's farmer cooperatives was due primarily to increased prices for grains and oilseeds and farm supplies. Cooperatives' sales of grains and oilseeds increased $7.8 billion, or more than 39 percent, from 1995. Farm supply sales increased $2.4 billion, or more than 11 percent. Total marketing sales by cooperatives climbed more than 14 percent, to $79 billion, in 1996. Cooperative net business volume was up for all commodity groups except rice and cotton. Rice revenues were stable, while cotton revenues dropped more than 6 percent. Income from services provided by cooperatives and other miscellaneous income was down $192 million, or nearly 6 percent. "With the changes enacted in the Federal Agriculture Improvement and Reform Act of 1996, the cooperative way of doing business in rural America makes more sense than ever," Long Thompson said. "Secretary Glickman and I are both committed to doing all we can do to ensure the farmers and others in rural America have the opportunity to share in economic growth." Cooperatives' sold farm supplies worth nearly $24 billion in 1996. Increases in petroleum (nearly 21 percent) and fertilizer (nearly 11 percent) sales were primarily responsible. Favorable weather was a major contributing factor. Cooperatives' total net business volume includes sales of crops, livestock and farm supplies. It excludes business done with other cooperatives. The total also includes receipts from services provided by cooperatives, such as trucking, storage, ginning and livestock breeding, as well as interest income and other miscellaneous income. While net income for all cooperatives changed only slightly from 1995, the change was dramatic among some types of cooperatives. Net income for farm supply cooperatives -- those that primarily obtain fertilizer, crop protectants, etc., for their members -- increased nearly 17 percent, from $808.2 million in 1995 to $942.7 million in 1996. Marketing cooperatives -- those that primarily sell, bargain and/or process crops, livestock and livestock products for their members -- saw net income dip 5.6 percent. Sugar cooperatives' net income increased significantly due to decreased losses in 1996. Fruit and vegetable cooperatives' net income decreased from $175.9 million in 1995 to $58 million in 1996, a drop of 67 percent. Depressed prices of certain vegetables was the major reason for the lower net income in this sector. Combined assets of $42.6 billion were up $2.3 billion, or nearly 6 percent. Total liabilities of $25.2 billion increased more than 6 percent. Net worth of $17.4 billion was up nearly 5 percent. Fourteen percent of cooperatives, up from 11 percent in 1995, experienced a loss in 1996. Losses totaled $122 million, up from $99.5 million in 1995. There were 3,884 U.S. farmer cooperatives in 1996, 122 fewer than in 1995. Two of every five cooperatives removed from USDA's list of U.S. farmer cooperatives were due to mergers/consolidations. About the same ratio was removed because of discontinued operations. Nearly one in five were sold or removed from the list for various other reasons. Twelve cooperatives were added to the list. Memberships in farmer cooperatives totaled 3.6 million in 1996, down more than 3 percent. The number of memberships is larger than the number of farms because many farmers belong to and use the services of more than one cooperative. Estimated number of full-time employees in cooperatives totaled 174,365, down from 175,399 in 1995. Table 1--FARMER COOPERATIVES' NET BUSINESS VOLUME, 1996 AND 1995 1 **************************************************************** Net business volume 2 Commodity or function 1996 1995 ***************************************************************** Million dollars Products marketed: Cotton 2,621 2,799 Dairy 22,924 21,784 Fruits and vegetables 9,395 9,272 Grains and oilseeds 3 27,631 19,864 Livestock and poultry 8,477 8,065 Rice 900 900 Sugar 1,933 1,869 Other products 4 5,448 4,796 Total 79,330 69,349 Supplies purchased: Crop protectants 2,829 2,628 Feed 5,386 5,017 Fertilizer 5,201 4,692 Petroleum 6,292 5,211 Seed 658 583 Other supplies 5 3,281 3,083 Total farm supplies 23,647 21,213 Services and other income: 6 3,092 3,284 Total 106,069 93,847 ***************************************************************** 1 Preliminary. Totals may not add due to rounding. 2 Excludes intercooperative business. Volume includes value of products associated with cooperatives that operate on a commission basis and bargain for members' products. 3 Excludes cottonseed. 4 Includes dry edible beans and peas, fish, nuts, tobacco, wool, and other miscellaneous products. 5 Includes building materials, containers, hardware, tires-batteries-accessories (TBA), farm machinery and equipment, and other supplies. 6 Includes trucking, ginning, storage, artificial insemination, rice drying, and other. Table 2--FARMER COOPERATIVES' NET INCOME, 1996 AND 1995 1 ***************************************************************** Total net income 2 Cooperative type *************************** 1996 1995 3 ***************************************************************** Million dollars Marketing: Cotton 84.1 83.5 Dairy 375.1 345.3 Fruit and vegetable 58.0 175.9 Grain and oilseed 377.1 384.9 Livestock and poultry 228.9 231.9 Rice 12.3 11.6 Sugar 9.1 1.2 Other products 4 159.9 147.2 Total 1,304.7 1,381.5 Farm supply 942.7 808.2 Related service 5 125.0 135.9 Total 2,372.4 2,325.6 ***************************************************************** 1 Preliminary. Totals may not add due to rounding. 2 Net income less losses. 3 Revised. 4 Includes bean and pea (dry edible), nut, tobacco, wool, fish, and miscellaneous marketing cooperatives. 5 Includes trucking, cotton gins, storage, artificial insemination, rice driers, and other service cooperatives. Table 3--FARMER COOPERATIVE NUMBERS AND MEMBERSHIPS, 1996 1 ***************************************************************** Cooperative type Cooperatives 2 Memberships ***************************************************************** Number Marketing: Cotton 3 16 42,561 Dairy 237 113,920 Fruit and vegetable 267 46,621 Grain and oilseed 1,066 783,427 Livestock and poultry 105 287,146 Rice 19 14,831 Sugar 49 11,800 Other products 4 253 360,470 Total 2,012 1,660,776 Farm supply 1,403 1,794,671 Related-service 469 186,505 Total 3,884 3,641,952 ***************************************************************** 1 Preliminary. 2 Operations of many cooperatives are multiproduct and multifunctional. They are classified in most cases according to predominant commodity or function as indicated by business volume. 3 Cooperative cotton gins included with related-service cooperatives. 4 Includes bean and pea (dry edible), nut, tobacco, wool, fish, and miscellaneous marketing cooperatives. # NOTE: USDA news releases and media advisories are available on the Internet. Access the USDA Home Page on the World Wide Web at http://www.usda.gov