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									           Dairy co-op survey reveals
           financial performance trends
By Carolyn Liebrand, Agricultural                  The 94 co-ops that participated in        1997 levels – by 22 and 25 cents,
Economist                                       the survey accounted for 98.5 percent        respectively.
USDA Rural Development/Cooperative              of the assets held by dairy cooperatives,    Net margins hold steady
Programs                                        93.6 percent of the milk volume                 In addition to marketing their
e-mail: carolyn.liebrand@usda.gov               handled and 60.6 percent of the nation’s     members’ milk, some cooperatives may
                                                155 dairy cooperatives in 2007.              also handle milk received from non-
Editor’s note: This article is based on a                                                    member producers, other cooperatives
USDA survey that gathered 2007 financial        Assets per cwt swell                         and/or other firms. The volume of milk
and marketing data for U.S. dairy                  Balance sheet items were calculated       going through a cooperative’s
cooperatives. More of the financial results     on a per cwt of member milk basis to         operations has an impact on efficiency
can be found in Research Report 219,            show the capital used by cooperatives to     and per unit costs, so the operating
“Financial Profile of Dairy Cooperatives,       market members’ milk (table 1). In           statement items are expressed on a per
2007”published by USDA and available            2007, dairy cooperatives had $8.41 in        cwt of total milk handled basis. (About
online at: www.rurdev .usda.gov/rbs/pub.        assets for each cwt of milk members          10 percent of the total milk volume
For a hardcopy of the full report, call (202)   sold through their dairy cooperatives.       handled by the 94 dairy cooperatives in
720-8381, or e-mail: coopinfo@wdc.usda          By this measure, total assets held by        2007 was milk received from another
.gov. The marketing operations information      dairy cooperatives increased by more         cooperative.)
and some broad financial figures presented      than $2 per cwt between 2002 and                Milk and dairy product sales were
here were also reported in the July/August      2007. In contrast, 2002 assets per cwt       $38.8 billion in 2007, or $23.68 per cwt
2009 issue of Rural Cooperatives (“Dairy        were less than $1 per cwt above 1997.        of total milk handled (table 2). Milk and
co-ops maintain steady market position.”)          Current assets of $5.08 per cwt           dairy product sales in 2007 were nearly
                                                represented 60.4 percent of total assets     $8 per cwt more than in 2002 and
                   he nation’s major dairy      in 2007. Dairy cooperatives also held        almost $5 per cwt above 1997. These
                   cooperatives had total       $3.23 in fixed assets (net of investments    differences generally reflect the changes
                   sales of $44.2 billion       in other cooperatives) and just 11 cents     in the average prices received per cwt
                   with net margins of          per cwt of member milk in investments        for all milk, which were $19.21 in 2007,
                   $404 million in 2007,        in other cooperatives in 2007.               $12.19 in 2002 and $13.36 in 1997.
according to a survey of dairy co-op               On the other side of the ledger, total       The 2007 price per cwt stands in
operations conducted by the                     liabilities were $6.09 per cwt in 2007.      stark contrast to milk prices during the
Cooperative Programs of USDA Rural              Almost three-fourths (72.3 percent) of       past year, which averaged $12.79 for
Development. The survey, conducted              the liabilities were current liabilities     2009.
every 5 years, shows that net margins           (which may include pending payments             Other sales and income was nearly
over the last three surveys (for 2007,          to members for their delivered milk).        $5.5 billion, resulting in $44.2 billion in
2002 and 1997) varied only slightly on a        Long-term liabilities were $1.69 per         total sales in 2007. This was $27.03 per
per hundredweight (cwt) of member               cwt in 2007. Total liabilities per cwt, as   cwt — higher than in both 1997
								
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