Lower dairy product prices resulted in lower revenue and a decline in assets for most dairy cooperatives in 2015, according to an annual USDA summary. Despite the decline, however, more than one-fifth of the nation's 100 largest cooperatives have dairy businesses.
The report, which ranks all agricultural co-ops based on business volume and total assets, is released annually as part of USDA's observance of October as National Cooperative Month. U.S. Secretary of Agriculture Tom Vilsack signed a Cooperative Month proclamation saluting the nation's cooperative business sector.
Dairy in Top 100 rankings
Twenty-one dairy cooperatives made the “Top 100” list for 2015 business volume, based on USDA’s rankings (Table 1). Business volume includes sum of total sales, service receipts, patronage income and non-operating income.
Due to weaker dairy commodity prices last year, most co-ops saw reduced gross revenue in 2015. However, with agricultural commodity prices generally lower across the board, most co-ops on the 2015 list saw declining revenues.
Among the largest co-ops, Select Milk Producers Inc., Artesia, New Mexico, made one of the largest jumps in 2015. At 14th, it moved up 14 spots on the Top 100 list. Lone Star Milk Producers, Wichita Falls, Texas, dropped from 38th in 2014 to 64th in 2015.
Only three dairy co-ops on the list – Select Milk Producers Inc., Cooperative Regions of Organic Producer Pools (CROPP) and Bongards Creameries – reported more business volume in 2015 compared to 2014. Those three, plus Upstate Niagara Cooperative, reported slightly higher assets compared to the year before.
The “Top 100” list includes co-ops involved in a wide range of businesses. While totals for most dairy co-ops reflect only dairy-related income, Land O’Lakes listed total 2015 net sales at $13.1 billion, down from $15.3 billion in 2014. Based on the 2015 Land O’Lakes financial report, net sales from its Dairy Foods division was about $4 billion in 2015, down from about $5.1 billion in 2014.
Dairy Farmers of America, which saw 2014 figures bolstered with the merger with longtime business partner Dairylea Cooperative, saw 2015 revenue decline by nearly $4 billion.
Iowa, Minnesota top co-op states
This year's list shows that Iowa is home to more Top 100 co-ops (15) than any other state. It is followed by Minnesota with 11 and Nebraska with nine. California and Illinois each have six, while Wisconsin has five. Minnesota and California each gained a new co-op in the Top 100 in 2015.
With lower commodity prices, USDA indicated total business volume fell for the Top 100 cooperatives, from $177 billion in 2014 to $149 billion in 2015. However, net income rose from $4.3 billion to $4.9 billion in 2015, an increase of 14 percent.
CHS Inc., a fuel, grain and food cooperative based in Inver Grove Heights, Minnesota, remains the nation's largest U.S. cooperative, with $34.7 billion in total business volume for 2015.
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Dave Natzke
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