Viewpoint

A model worth celebrating

October is Co-op month. It is worth celebrating. I was reminded of that fact recently when I had the chance to interact with fellow leaders from the National Council of Farmer Cooperatives. Each time I am around them, I hear stories of how much agricultural cooperatives across the country contribute to our industry and the entire economy. The scale and scope of cooperatives are truly impressive. 

The USDA publishes annual statistics to provide information about U.S. cooperatives. I’ll refer to some of them below. Because it takes agency statisticians about a year to gather and process the data, the numbers I refer to here will be from 2017. Data from 2018 should be out in December. While there surely has been movement in the totals, the general range is a fair representation of the industry. The most current stats show that:

  • Total gross business volume of all agricultural cooperatives was $197 billion among 1,871 cooperatives in the United States. 
  • For U.S. ag cooperatives, net income after taxes was $6.2 billion.
  • Cooperatives held $93.5 billion in assets of which $28 billion was in property, facilities and equipment. 
  • Agricultural cooperatives had 139,000 full-time employees.
  • Cooperatives had 1.9 million voting members. 

These are impressive numbers showing that cooperatives continue to lead U.S. agriculture in meaningful ways. 

Many of those ways stretch back to the same central needs farmers had when MFA was formed 105 years ago. Farmers needed buying power for farming inputs and market access to sell what they produced on the farm. Even with the tremendous change that agriculture has undergone in the past 100 years, those needs remain. MFA is committed to fulfill them.

As technological, regulatory and economic forces continue to push agricultural suppliers toward consolidation, I would tell you that MFA has sharpened its focus on providing its members buying power in the marketplace. We actively seek improved strategic agreements among input suppliers. I say “strategic” in the sense that MFA employs centralized buying power and the product volume provided through your participation in the cooperative to broker agreements among suppliers to benefit MFA members. Access to technology, product availability, price as well as credit and delivery terms are part of our considerations.

Cooperatives like MFA also deliver value to member-owners in new ways. As agriculture continues to evolve into the information age, digital technology used to collect data on your farm has shifted from what was once an add-on to something closer to a standard. It is a tool that makes farmers more efficient and can be the difference-maker when profit margins stretch thin. 

To fill that need, a staggering number of startups have entered the agricultural marketplace to provide weather, data and precision services. One challenge for producers is to know which of these services will endure to become long-lasting, effective and reliable. Cooperatives evaluate technology and adopt those that are reliable and fit into our operations and yours. From my perspective, though, it’s the expertise that a company like MFA can match with technology that gives our members an advantage.

It’s no secret that farm demographics are changing. Farm size is changing. And as I mentioned earlier, the business structure of suppliers is changing. Cooperatives must take all these changes into account as they develop operational strategies and goals. We must change along with the rest of the industry. Yet, even as cooperatives evolve, I believe the member-owned cooperative model is a steady and needed constant in agriculture. The focus must be in finding ways both old and new to provide value to our owners.

On that count, MFA is in good hands. We still operate through a member-directed, democratic approach to governance. The board of directors you elect to guide MFA has your interests at heart. 

To me, that might be the most impressive part of all the numbers I mentioned above. Those numbers represent billions of dollars in sales, income and assets. They represent more than 100,000 employees. But most importantly for agriculture, they represent some 2 million member-owners directly involved and invested in the business that feeds, clothes and fuels a nation. 

Yes, cooperative month is worth celebrating every October.

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