More than 200 years ago, the first cooperative was formed in the United States by Benjamin Franklin and it still operates today. While cooperatives are often most closely identified with agriculture, they work effectively to meet people’s needs in all sectors of life – many of which you might not realize affect you every day.
Over 100 million Americans own and control more than 47,000 cooperative businesses that provide goods and services in every economic sector. From the outside, cooperatives may look like any other business. But inside, they are very different. A cooperative, also known as a co-op, is owned and controlled by the people closest to the business – the people who do the business – not distant shareholders.
Co-ops range from small to large companies, and they help people do what they couldn’t do on their own, or what they realized they could do better together. And that remains true today.
Farmer-owned cooperatives are still the economic backbone of many rural communities across the nation. However, the changing landscape of farmer-owned co-ops is on trend with production farms. The Arthur Capper Cooperative Center reported that Kansas headquartered cooperatives have fallen from 365 in the 1950s to 62 in 2021. In 1976, there were approximately 284 Nebraska cooperatives. Today there are closer to 35 farmer-owned cooperatives continuing to do business in Nebraska.
Several reasons impact this trend, but two primary factors include the changing demographics on the farm and transportation logistics. There are fewer farmers today and their production facilities are more diversified and much larger. Co-ops have had to respond to those needs, but also expand their size and scope to meet the needs of the industry.
“Even though there has been a dramatic reduction in the number of farmer-owned cooperatives in Nebraska, there remains approximately 64,000 voting members of co-ops and farmer-owned cooperatives have locations in 401 Nebraska communities,” said Rocky Weber, president of the Nebraska Co-op Council.
While fewer, co-ops continue to offer the goods and services needed to serve the 21st century farmer – who also farms more land, but are fewer in number.
When a co-op is profitable, dollars are returned back to farmer-owners in two ways, the first is through cash patronage. This is a direct return back to producers based on the amount of business they have done with the co-op. Those dollars stay local, to be reinvested back into the community. In addition to cash patronage, the co-op may have earnings that are earmarked for later distributions. In the short-term, these equity dollars are an investment by members in the co-op and can be used by the co-op to make capital improvements, which further grow the business or might make the co-op more efficient. In turn, the additional efficiencies generate more profits that go back to the producer.
Brandi Miller, president of the Kansas Co-op Council said, “The cooperative structure allows producers to really benefit from supporting their own business, and the economies of scale allow producers access to resources that they may not have on their own.”
A CO-OP’S HISTORY
Staying on trend with farming operations, CVA Co-op has grown in size in order to continue to provide value to its member-owners.
2014: Central Valley Ag merged with United Farmers Co-op
2017: Central Valley Ag merged with Farmway Co-op
Central Valley Ag was formed when these three merged: Central Farmers, Agland Co-op, and Tri Valley Co-op in 2003
United Farmers Co-op was formed when these three merged: York Co-op, United Co-op, and Shelby Co-op in 2002.
Farmway Co-op was first formed in 1911.
Learn more about cooperatives by visiting the What is a Co-op? page.