|No other organizations reflect the American ideals
of democracy and self-help as do cooperatives. Their success,
importance, and beneficial impact on the American economy testify to the
role they play in all of our lives.
Cooperatives incorporate the ideals which drive the most successful
economy in history. Over 100 million Americans own and control more than
47,000 cooperative businesses that provide goods and services in every
Cooperatives provide essential services to the American economy with
benefits for consumers, producers, and small businesses in urban and
rural America. They range in size from small buying clubs to
Fortune 500 companies.
Cooperatives are member owned and democratically controlled
enterprises created and used by their member-owners to provide goods and
services. Members unite in a cooperative to get services otherwise not
available, to get quality supplies at the right time, to have access to
markets, or for other mutually beneficial reasons.
Cooperatives exist not to generate a profit for themselves or outside
investors, as do other businesses, but rather to provide goods and
services at competitive prices. Profits--or net income--is distributed
to members (patrons, as they are called) in the form of patronage
Cooperative Principles and Business
cooperative is a user owned and controlled business in which
benefits are distributed according to a member’s use of it. Three
principles distinguish cooperatives from general corporations:
user-owner principle means the people who use the cooperative own
and finance the business. Cooperatives are financed by members
purchasing stock, paying membership fees, or accepting self-imposed
assessment on products purchased and/or sold or fees for services.
In some cooperatives, members reinvest their earnings (profits) to
capitalize the business.
stems from the majority of the customers being members who are also
responsible for selecting the members of the board of directors. As
representatives of the members, the directors are responsible for
setting policy and providing oversight on all the cooperative’s
provide that the cooperative’s primary purpose is to distribute
benefits to members. Distribution of these benefits is based on
members’ use of the cooperative, not on the amount of capital they
Cooperatives: an Integral Part of the American Economy
than 29,000 cooperatives operate in every sector of the economy and
in every congressional district; Americans hold over 350 million
co-op memberships [National Cooperative Business
cooperatives generate 2 million jobs and make a substantial
contribution to the U.S. economy with annual sales of $652 billion
and possessing assets of $3 trillion. [National
Cooperative Business Assn. 2011]
majority of our country's 2 million farmers are members of the 2,238 farmer-owned cooperatives. They provide over 129,000
jobs nationally. [USDA Rural Development Cooperative
farmer owned cooperatives have a net business volume of over $201
billion annually. [USDA Rural Development Cooperative
6,700 credit unions provide financial services to 97 million U.S.
than 900 rural electric co-ops deliver electricity to more than 42
million people in 47 states. This makes up 42% of the nation's
electric distribution lines and covers 75% of our country's land
mass (NRECA Facts & Figures 2014)
1.2 million rural Americans in 31 states are served by the 260
telephone cooperatives (NTCA Facts, 2014)
businesses in Nebraska operate in marketing, farm supply, and service
areas. The most common types are agricultural marketing and supply
engage in a broad range of activities for farmer members including:
bargaining, grading, transporting, processing, distribution, research,
and product development. Marketing cooperatives derive at least half
their business volume from the sale or processing of farm products.
Supply cooperatives provide farmers with production supplies and
products such as fertilizer, agricultural chemicals, fuels and propane,
seeds, feed, and others. Supply cooperatives also provide building
supplies, packaging supplies, farm machinery and equipment, animal
health products, automotive supplies, food, and hardware.
Service cooperatives provide specialized business services related to
agricultural business operations of farmers, ranchers, or cooperatives
such as trucking, storing, drying, artificial insemination, financing,
electric and telephone services, communications, insurance, livestock
marketing, and others.
In addition to the local cooperatives in many Nebraska communities,
regional cooperatives also operate in Nebraska. They provide farm
supplies at wholesale to local cooperatives, marketing and processing
opportunities for crop and livestock production, services to local
cooperatives and direct to owner-users, and other functions. Federated
regional cooperatives are owned by the local cooperatives to which they
provide services and/or farm supplies and marketing opportunities.
Centralized regional cooperatives are owned directly by producers or
their customers, while still other regionals are owned by a combination
of individual customers and local cooperatives.
Regional cooperative members operating in Nebraska include:
Milk Producers, Inc.
Farmers of America, Inc.
Credit Services of America
Points Federal Credit Union
Livestock Marketing Association
Rural Radio Association [KRVN/KNEB/KTIC]
Nebraska Ag Facts of Interest
Nebraska cooperatives are a significant factor in the agricultural industry and
the economy of the state. Examples of their impact are as follows:
|As of October 2013, cooperatives are operating 389 locations
across the state providing much needed jobs and services in our most rural
|As of October 2013, cooperatives employ over 5,100 individuals across
|As of October 2013, over 53,000 farmers and ranchers are voting members
of Nebraska cooperatives with many members of more than one cooperative.|
|In 2012/13, ag supply and marketing cooperatives paid out a collective total
of $78 million in patronage refunds to members. In addition, $16 million was paid out in members equity/estate redemption.|
|Nebraska ag supply and marketing cooperatives invested over $157 million in
new facilities and equipment in 2012/13.|
|These cooperatives paid over $11 million in property taxes and over $14 million
in state and federal income taxes in 2012/13.|