Farmer Co-op Business Volume, Income Decline

September 2, 1999

Business volume of farmer-owned cooperatives declined to $104.4 billion last year, a decline from $106.7 billion in 1997. Cooperatives' net income of $1.7 billion also declined in 1998 from $2.3 billion in 1997. Gross receipts from crop, livestock, farm supply and services sales make up business volume.

The net income total was the lowest since 1993 and a substantial decline from the income record of $2.36 billion set in 1995, according to data compiled by USDA's Rural Business-Cooperative Service. Lower profit margins for farm supplies, poultry and sugar were major factors causing the income decline. Losses suffered by a number of cooperatives also hurt the overall income performance, USDA reports.

Crop and livestock marketing receipts declined nearly 1.5%, farm supply sales declined 3.8% and service receipts and other income declined 3.5% in 1998. Among the major products marketed, grain and oilseed business volume declined the most -- 13.6% -- due to significantly lower prices.

The decline in farm supply sales was due mainly to lower prices for livestock feed, petroleum and fertilizer. Feed sale receipts alone declined 10.4% from 1997. Farm supply cooperatives had net income of $578.8 million, nearly 31% less than in 1997.

Farm marketing cooperatives, or those that sell crops, livestock and value-added products for their members, also suffered a steep 22.5% decline in net income. Fruit-vegetable, poultry and sugar cooperatives all suffered significant income declines, but dairy cooperatives posted a 21% income gain. Net income for grain and oilseed cooperatives increased 1% despite substantially smaller sales volume.

The number of agricultural cooperatives declined to 3,651 from 3,791 in 1997; membership in farmer cooperatives totaled 3.35 million in 1998, 2.1% fewer than in 1997.