Lower dairy product prices resulted in lower revenue for most dairy cooperatives in 2016, according to an annual report from the National Cooperative Bank. With the revenue decline, fewer dairy co-ops were listed among the nation's 100 largest cooperatives.
The report, which ranks all agricultural co-ops based on business volume and total assets, is released annually as part of the October National Cooperative Month observance.
Dairy in Top 100 rankings
Sixteen dairy cooperatives made the “Top 100” list for 2016 business volume, down from 21 the year before (Table 1). Business volume includes sum of total sales, service receipts, patronage income and non-operating income.
Among the largest dairy co-ops, Dairy Farmers of America and Land O’Lakes held their positions.
Cooperatives voluntarily submit revenue and asset information to NCB for the report, and two large dairy co-ops absent from the list, Southeast Milk Inc. (SMI) and Tillamook County Creamery, did not submit data for 2016, according to Barry Silver, who has been compiling the list for more than 30 years. Based on industry estimates, both would have made the Top 100.
SMI reported the sale of its extended shelf life (ESL) dairy product business this fall to Canada-based Saputo Inc. At that time, Jim Sleper, chief executive officer, said SMI generated about $800 million in sales annually. SMI’s ESL activities generated revenues of approximately $47 million (U.S. dollars) for the 12-month period ending on June 30, 2017.
An annual list of top dairy processors, compiled by Dairy Foods, estimated Tillamook’s 2016 sales at about $688 million.
Others not listed in 2016 were NFO Inc., Lone Star Milk Producers, St. Albans Creamery and Swiss Valley Farms, which merged with Prairie Farms in 2016.
Due to weaker dairy commodity prices last year, most co-ops saw reduced gross revenue in 2016. However, with agricultural commodity prices generally lower across the board, most ag co-ops on the 2016 list also saw declining revenues.
Two dairy co-ops on the list – Upstate Niagara Cooperative and Bongards Creameries – reported more business volume in 2016 compared to 2015.
Land O’Lakes and Cooperative Regions of Organic Producer Pools (CROPP) also posted slightly higher business volumes, but business scope of those co-ops includes other agricultural segments.
Land O’Lakes listed total 2016 net sales at $13.2 billion, but based on the 2016 Land O’Lakes financial report, net sales from its Dairy Foods division was about $3.8 billion in 2016, down from about $4.1 billion in 2015 and $5.1 billion in 2014.
Among all dairy co-ops listed, year-to-year changes in total assets were relatively small.
The Top 100 list includes co-ops involved in a wide range of businesses. Fifty-two agricultural co-ops made the Top 100 list, followed by 20 energy and communications co-ops. Grocery and finance co-ops had 10 each.
CHS Inc., a fuel, grain and food cooperative based in Inver Grove Heights, Minnesota, remains the nation's largest U.S. cooperative, with $30.3 billion in total business volume in 2016. That was down from $34.7 billion in 2015.
Despite lower commodity prices, NCB indicated total business volume rose for the Top 100 cooperatives, to $208 billion.
View the entire NCB Co-op 100 report.
- Progressive Dairyman
- Email Dave Natzke