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U.S. Cooperatives Extend Farmers’ Reach Into Global Markets
By Tracey L. Kennedy
U.S. producer-owned cooperatives play a major role in U.S. agricultural trade, accounting for more than one-tenth of the total value of exports. Cooperatives export every major commodity -- from bulk grains and feeds to high-value branded products.
Cooperatives are businesses -- in this case, farmers -- that join together to fulfill mutual objectives like marketing products, purchasing supplies, and providing services -- that individual business owners can’t accomplish on their own.
In 1995, close to 100 U.S. farmer-owned cooperatives reported agricultural exports valued at more than $5.6 billion, up from $4.13 billion in 1990.
Cooperatives allow farmers to control their commodities beyond the farmgate and into the marketplace. For many cooperatives, this control extends only to the first-handler level, where member commodities are assembled, graded and sold in bulk form.
Others have extended farmers’ reach to supermarket shelves by adding value to products through processing and marketing. Cooperatives have also taken their place alongside investor-owned agribusinesses as global marketers of U.S. food and fiber products.
More than 69 percent ($3.84 billion) of cooperative exports for 1995 were bulk commodities such as grains, oilseeds and cotton, while consumer-oriented products like fresh and processed fruits and vegetables, meats, dairy products and tree nuts accounted for more than 25 ($1.42 billion) percent of the total.
Intermediate or partially processed products such as flour, meals, hides, skins, oils, sugars and sweeteners accounted for about 6.3 percent ($353 million) of the total. In addition to food and agricultural products, cooperatives also reported $69.5 million in exports of products such as fertilizer, petroleum, machinery, and equipment.
Cooperative Share of U.S. Exports
Exports by cooperatives accounted for about 12.3 percent ($5.6 billion) of total U.S. agricultural exports in 1995, compared to a 10.5 percent share in 1990.
Cooperatives shipped 14.8 percent of bulk commodities exports (primarily grains, oilseeds, and cotton) in 1995 -- up from 12.2 percent in 1990. Their share of U.S. exports of consumer-oriented products (mainly fresh and processed fruit, tree nuts, meats) was 7.6 percent ($1.4 billion) down from 13.9 percent in 1990.
Cooperative exports of intermediate products (oils, meals, hides, skins, etc.) accounted for a little more than 3 percent of the U.S. total, a slight increase over 1990. Cooperative export shares exclude large volumes of commodities originated by cooperatives but sold to and exported by other firms.
Size, Concentration, and Intensity of Cooperative Export Sales
In 1995, the value of exports by individual cooperatives ranged from less than $1 million to more than $250 million. The Cooperative Services program of USDA’s Rural Business-Cooperative Service has measured agricultural exports by U.S. cooperatives via voluntary mail surveys, at five-year intervals since 1980.
Of the 91 cooperatives reporting in 1995, 37 had export sales ranging from $1 million to $9.9 million. Another 27 co-ops reported exports of less than $1 million each. Five cooperatives reported exports of $250 million or more.
Seventy-seven percent ($4.32 billion) of all cooperative exports reported in 1995 were concentrated among the five largest cooperative exporters--a significant increase from 1990 when 61 percent of co-op exports were concentrated among the top five shippers. The top exporters of 1995 represent a diverse array of products
-- from grains and oilseeds to cotton and horticultural products.
Though some cooperatives export only in years of excess production, many consider exporting a key element in their overall marketing strategy. One measure of the importance of exporting to individual cooperatives is "export intensity," or exports as a percentage of total sales.
Cooperatives exporting bulk commodities registered exports ranging from less than 1 percent to almost 70 percent. On average, bulk commodity exports accounted for 17.3 percent of total sales. Consumer-oriented products accounted for an average of 13.3 percent of cooperatives’ total sales, ranging from less than 1 percent to about 58 percent. Export intensity for cooperative shippers of intermediate products averaged 12.4 percent, ranging from about 2 percent to 53 percent.
Services Available to Cooperatives
The goal of the Cooperative Services program of USDA’s Rural Business-Cooperative Service (RBS) is to help rural residents form new cooperative businesses and improve the operations of existing cooperatives.
RBS provides technical assistance, conducts cooperative-related research, and produces information products to promote public understanding of the cooperative form of business.
For further information or assistance for cooperatives, contact:
USDA/RBS/Cooperative Services
Stop 3250
Washington, DC 20250-3250
Tel.: (202) 720-7558
Fax.: (202) 720-4641
E-mail: coopinfo@rurdev.usda.gov
website: http://www.rurdev.usda.gov
Tracey L. Kennedy is an agricultural economist with the Rural Business-Cooperative Service in Washington, DC. Tel.: (202) 690-1428 Fax.: (202) 690-2723
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