United States

Department of

Agriculture

Rural Business–

Cooperative

Service

RBS Research

Report 193

Financial Profileof

Largest 100 Agricultural

Cooperatives, 2000
Preface W ith a few exceptions, the agriculture sector continued to struggle with lower prices

and higher costs of production in 2000. This, in turn, put pressure on cooperatives.

According to a report from the Rural Business-Cooperative Service, Farmer

Cooperative Statistics, 2000, total revenue was up 4.7 percent for all U.S. farmerowned cooperatives. However, net income was down 3.9 percent. The total number of

agricultural cooperatives contracted while the consolidation at the top continued. There

were 120 fewer cooperatives in 2000 than in 1999.

The volume of business conducted by the largest 100 agricultural cooperatives represents nearly 62 percent of the total gross business volume of all cooperatives, up from

58 percent in 1999. They also control 60 percent of the total assets while representing

only 3 percent of all agricultural cooperatives.

The largest 100 agricultural cooperatives vary tremendously in the volume and type of

business they perform. The total volume of business ranges from $40 million to $12.3

billion. The types of businesses include manufacturing, marketing, processing and selling farm supplies. In this report, the category in which the cooperative is included is

based primarily on the type of commodity it markets or processes for the members.

While more than half of the largest cooperatives sell farm supplies, only those that sell

predominantly farm supplies will be included in that category. Some cooperatives are

involved with several commodities and cannot be easily categorized, so they were categorized as diversified cooperatives.

i
Contents Preface ...........................................................i

Highlights ...........................................................i

Revenue Rebounds ..............................................1

Gross Margins Continue Upswing ....................................3

Net Operating Margins Bounce Back .................................3

Sugar Cooperative Turnaround ..................................4

Net Margins Continue To Slide ......................................5

Members Receive Higher Patronage .................................6

Assets Continue To Expand ........................................7

Investments by Cooeratives ....................................10

Higher Operating Loans Increase Liabilities ...........................10

Co-op Banks Fund Grain Debt ..................................12

Diversified Co-op Liabilities ....................................12

Long Term Debt Declines ......................................13

Equity Continues To Grow .........................................13

Performance Continues To Erode ...................................14

Leveraging Risk to Business ...................................16

Less Liquidity in Cotton .......................................18

Performance Measures Fall ....................................20

Heavy Debt Concerns ........................................21

Are Cooperatives Ready for the Future? .............................21

Appendix ..........................................................22

i
Highlights The combined total revenue of the largest 100 agricultural cooperatives jumped from

$66.3 billion in 1999 to $70.8 billion in 2000. The 7-percent increase is due mostly to

higher farm supply sales and service revenue. Total revenue for the last 2 years were

as follows:

Year Total Operating Revenue

Billion dollars

1999 66.3

2000 70.8

Total revenue was not the only area showing promise; gross margins improved 7.5

percent, to $6.9 billion in 2000. The average gross margins as a percent of total operating revenue is illustrated below:

Year Gross Profit Margins

Percent

1999 15.9

2000 16.5

While sales and gross margins were up 7 percent, net operating margins soared 25

percent, to $933 million in 2000. A lower growth in operating expenses in relation to

revenue supported higher net operating margins.

Year Net Operating Margins

Million dollars

1999 744.7

2000 932.9

Despite higher operating margins, total net margins were down 14 percent, to $454.9

million in 2000. Higher interest payments coupled with lower revenue from other nonoperating source hurt the bottom line. Net margins for the last 2 years are shown

below:

Year Net Margins

Million dollars

1999 527.1

2000 454.9

iii
Highlights Combined assets for the 100 largest agricultural cooperatives were valued at $29.8 billion, up 4 percent from 1999. Nearly every category of assets increased in value.

Year Total Assets

Billion dollars

1999 28.6

2000 29.8

Total liabilities jumped 5 percent in 2000. Leading the increase was short-term debt,

which jumped 13 percent. Long-term debt fell by 2 percent.

Year Short-term Debt Long-term Debt

Billion dollars

1999 3.3 6.5

2000 3.7 6.3

Member equity increased 1.9 percent. This was mainly due to retained patronage

refunds and issuance of preferred stock. Unallocated equity fell by 3.8 percent, to end

2000 at $1.8 billion. Sources of member equity are:

Year 1999 2000

Billion dollars

Preferred Stock 1.7 1.8

Common Stock 0.7 0.7

Certificates and Credit 5.6 5.8

Unallocated 1.9 1.8 ___ ____

Total 9.9 10.1

The liquidity for the largest 100 agricultural cooperatives continues to slowly erode.

This is illustrated in the current and quick ratios. The declining liquidity is caused mostly by the jump in short-term debt.

Year Current Quick

Ratio

1999 1.40 0.78

2000 1.37 0.76

iv
Highlights Cooperatives increased their leverage slightly in 2000. This was mostly due to larger

changes in liabilities. The slight increase in leverage and the drop in liquidity would

indicate that operations are starting to be financed more by debt than by the operations themselves.

Long-term 

Year Debt-to-Asset Debt-to-Equity

Percent Ratio

1999 60 .60

2000 61 .61

Activity ratios held steady with the increase in revenue.

Local Asset Fixed Asset 

Year Turnover Turnover

Percent

1999 2.7 14.3

2000 2.7 14.4

v
Financial Profile of Largest 100 

Agricultural Cooperatives

David Chesnick

Agricultural Economist

Rural Business-Cooperative Service

Revenue Rebounds

Revenue of the largest 100 agricultural cooperatives followed the trend of all agricultural cooperatives. Total revenue was up 7 percent (table 1) fro m

1999. This marked a turnaround from the prior 4 years

(figure 1). Appendix tables 1A to 9A report the consolidated statement of operations by commodity group.

Revenue for most cooperatives increased, with 57

showing higher revenue compared with 39 the year

before. However, 69 percent of the increase was due to

three cooperatives.

Driving revenue higher was farm supply sales, which

jumped nearly $2.7 billion in 2000. Petroleum gained

the most, accounting for 83 percent of the total increase

in farm supply sales.

Dairy cooperatives had lower revenue despite a

4-percent jump in milk volume. USDA’s National

Agricultural Statistics Service (NASS) reported the

average price index for dairy products fell 15 percent.

This culminated in a 2-percent decline in total sales for

dairy cooperatives included in the largest group.

Lower production coupled with suppressed

prices resulted in declining revenue for rice cooperatives. NASS reported that between 1999 and 2000, rice

1

Figure 1—Revenues for top 100 agricultural cooperatives, 1996-2000

80

70

60

50

40

30

20

10

0

Other operating

revenues

Farm supply

Marketing

1996 97 98 99 2000

Prior years restated

Billion dollar
production fell 7 percent while the average price fell 27

percent. The result for cooperatives was a 5-percent

drop in sales revenue.

Sugar cooperatives continued to face difficult

times in 2000. Despite higher production volume for

most of these cooperatives, lower prices pushed overallrevenue down. Operating revenue fell 7 percent in

2000, the first major decline for sugar cooperatives

since 1990.

Despite lower revenue of a few sectors, other

marketing cooperatives helped push total marketing

revenue for all cooperatives up 4 percent. Cotton cooperatives showed an impressive 24-percent increase in

total marketing and sales revenue to end the year at

$1.5 billion. The increase was boosted by both quantity

and prices.

Poultry & livestock cooperatives showed a slight,

2-percent increase in marketing sales, ending 2000

with $2.5 billion. Most was due to higher beef prices

2

Table 1—Consolidated statement of operations for top 100 agricultural cooperatives, 1999-2000

Percent

2000 1999 Change change

——————————————$1,000 —————————————

Revenue

Marketing $51,559,378 $49,664,378 $1,895,000 3.82

Farm Supply 18,266,457 15,573,040 2,693,417 17.30

—————— —————— —————— — — —

Total Sales 69,825,835 65,237,418 4,588,417 7.03

—————— —————— —————— — — —

Other Operating Revenue 616,537 574,118 42,419 7.39

—————— —————— —————— — — —

Total Operating Revenue 70,442,372 65,811,536 4,630,836 7.04

Cost of Goods Sold 63,494,154 59,345,306 4,148,848 6.99

—————— —————— —————— — — —

Gross Margin 6,948,218 6,466,230 481,988 7.45

Expenses

Operating Expenses 6,015,351 5,721,550 293,801 5.13

—————— —————— —————— — — —

Net Operating Margins 932,867 744,680 188,187 25.27

Other Revenue (Expenses)

Interest Expense (749,403) (654,451) (94,952) 14.51

Interest Revenue 82,847 68,008 14,839 21.82

Other Income 256,137 374,942 (118,805) -31.69

Other Expenses (132,378) (58,055) (74,323) 128.02

Patronage Revenue 35,387 51,481 (16,094) -31.26

—————— —————— —————— — — —

Net Margins from Operations 425,457 526,605 (101,148) -19.21

Non-Operating Revenue (Expenses) 29,410 470 28,940 6157.45

—————— —————— —————— — — —

Net Margins 454,867 527,075 (72,208) -13.70

Distribution of Net Margins

Cash Patronage Dividends 204,833 169,108 35,725 21.13

Retain Patronage Dividends 197,523 145,316 52,207 35.93

Nonqualified Non-cash Patronage 18,419 19,054 (635) -3.33

Dividends 50,417 45,224 5,193 11.48

Unallocated Equity (2,494) 44,877 (47,371) -105.56

Income Tax (13,831) 103,496 (117,327) -113.36

—————— —————— —————— — — —

Total Distribution 454,867 527,075 (72,208) -13.70
that pushed up revenue for livestock cooperatives. On

the other hand, higher supply than the market could

absorb continued to push down both broiler prices and

poultry industry revenue.

Diversified cooperatives showed a 17-percent

increase in total sales revenue. Most of the gain was

carried on the back of farm supply sales, which

accounted for two-thirds of the $4 billion increase.

Higher petroleum sales led the way. For diversified

cooperatives, petroleum sales jumped 46 percent, to

$5.1 billion. This was mostly due to higher prices.

Petroleum accounted for 60 percent of the gain in farm

supply sales for diversified cooperatives.

Since 1996, fruit and vegetable cooperatives’ sales

revenue has climbed steadily between 2 and 3 percent

per year. These cooperatives ended 2000 with $6.9 billion in total operating revenue, up 3 percent. However,

the growth in sales between the various cooperatives

was mixed. Some was attributed to higher value for

fresh and processed fruit. For example, NASS indicated the total value of grapefruits and lemons produced

in 2000 jumped 23 percent. Oranges, on the other

hand, increased 3 percent in value due to higher volume, but the average unit price dropped 23 percent.

The value of vegetable production was higher in 2000

than in 1999, but vegetable-processing cooperatives

also showed mixed results. As with citrus, the price

and value depended on what vegetable was being

processed or sold.

Overall, the cost of goods sold and revenue

increased by 7 percent. However,there were variations

across commodity groups. While most commodity

groups had changes in cost of goods sold in proportion

to change in sales revenue, others had disproportional

changes.

Poultry & livestock cooperatives returned a higher percent of the increased revenue back to their members in the form of cost of goods sold--92 percent in

1999 and 94 percent in 2000. On the other hand, fruit &

vegetable cooperatives had lower cost of goods sold

despite higher revenue, thus pushing up gross margins

13 percent in 2000 compared with a 3-percent increase

in their sales revenue.

Gross Margins Continue Upswing

Across all commodity groups, gross margins

increased by the same proportion as sales and cost of

goods sold. Gross margins were up 7 percent, to $6.9

billion in 2000. This represents the second year in a

row the top 100 agricultural cooperatives ended their

year with higher gross margins. Every commodity

group showed an increase in gross margins except

poultry & livestock. As was explained earlier, these

cooperatives increased payments for their members’

products by more than the increase in sales, thus lowering their gross margins.

Cooperatives in some commodity groups--such

as the dairy, rice and sugar--had lower revenue, but

their cost of goods sold fell by a larger percentage,

thus allowing higher gross margins. Other groups--

such as fruit & vegetable cooperatives--boosted gross

margins by lowering their cost of goods sold but still

maintained higher revenue.

Net Operating Margins Bounce Back 

Operating expenses for all top 100 agricultural

cooperatives jumped 5 percent in 2000. For those

reporting labor expenses, total wages and benefits

increased 6 percent. Labor expense represented 50 percent of total operating expense—virtually the same as

in 1999.

Leading this increase were cotton cooperatives

with 31 percent followed by dairy with 11 percent. The

growth in operating expenses for cotton cooperatives

can partly be attributed to the higher volume

processed, which means higher labor expenses. These

costs were up 39 percent in 2000.

Higher volume of milk processed by dairy cooperatives pushed up operating expenses. Labor costs

increased 6 percent while total operating expenses

jumped 11 percent.

Farm supply and sugar cooperatives had lower

operating expenses in 2000 than in 1999. Operating

expenses for farm supply cooperatives were down 6

percent, due mostly to the restructuring of one cooperative. Otherwise, operating expenses for the group

increased 5 percent. Labor costs were up 4 percent.

Operating costs for sugar cooperatives decreased

10 percent. All sugar cooperatives in the top 100 agricultural cooperatives showed improved efficiency in

their operations. However, labor costs increased 3 percent and represented 62 percent of total operating

expenses in 2000 versus 54 percent in 1999. Lower revenue forced sugar cooperatives to tighten operations.

Fruit & vegetable cooperatives’ operating expenses increased 9 percent. Reported labor expenses gre w

at the same rate as total operating expenses and represented 41 percent of total expenses in 1999 and 2000.

Operating expenses for all other commodity

groups increased a moderate 5 percent. Rice and poul3
try & livestock cooperatives reported steady labor

expenses despite higher operating expenses. Labor

costs pushed operating expenses for grain cooperatives up 8 percent.

Despite higher operating expenses, net operating

margins for the largest agricultural cooperatives

jumped 25 percent, to $933 million, between 1999 and

2000. This halted a declining trend, ongoing since net

operating margins peaked in 1995 at $1.6 billion (see

figure 2). Yet, not all commodity groups fared well.

Cotton, poultry & livestock and rice cooperatives

had lower net operating margins for 2000 than in 1999.

However, most declining values within these commodity groups were due to a single cooperative within

each sector. The cooperative that pulled down the

operating margins for each sector ended up paying a

higher percentage for its cost of goods sold. So, while

the operating margins were lower, it could be inferred

that this was due to higher payments for the members’

product. Poultry & livestock cooperatives ended with

a net operating loss.

Most cooperatives in the other commodity

groups had mixed results, with a larger number having higher net operating margins in 2000. Thus, overall

net margins increased from 1999.

Sugar Cooperatives Turnaround

Sugar cooperatives showed the largest turnaround, nearly doubling their net operating margins

from 1999. Most noteworthy is that despite higher

labor costs, overall operating expenses dropped. Labor

expenses were up of 3 percent while total operating

expense fell 10 percent. The ability to control operating

expenses gave sugar cooperatives the largest value of

net operating margins over the past 5 years.

Increased gross margins for grain cooperatives

absorbed higher expenses. The result was a 7-percent

increase in grain cooperative net margins in 2000.

Throughout the mid to late 1990s, farm supply

cooperatives had been losing ground in their operations. The result was net operating losses in 1999.

However, in 2000, the trend was reversed thanks to

higher sales and lower expenses. The result was net

operating margins of $64 million.

Fruit & vegetable cooperatives found their net

operating margins higher in 2000, mostly due to lower

cost of goods sold. Most of these cooperatives either

lowered the processing costs included in their cost of

goods sold or adjusted payments to members for the

products. In any case, net operating margins were up

68 percent.

4

Figure 2—Net operating margins for top 100 agricultural cooperatives, 1996-2000

1.8

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

1995 96 97 98 99 2000

Prior years restated

Billion dollar
Diversified cooperatives showed increases in revenue, costs and expenses. However,increased revenue

more than offset higher expense, and net operating

margins jumped 49 percent.

Net Margins Continue To Slide

Interest expense jumped almost 15 percent in

2000. The nearly $750 million increase was due mostly

to cooperatives carrying higher debt, which reached a

record of more than $10 billion.

Dairy, diversified, fruit & vegetable and farm

supply cooperatives were most heavily indebted. They

held three-fourths of the debt for all cooperatives

while representing 54 percent of the largest 100 agricultural cooperatives and 83 percent of total revenue.

Dairy cooperatives actually lowered their interest

expense by 1 percent while overall debt increased by 1

percent, caused by their debt structure. More working

capital was needed than long-term financing.

The situation facing diversified cooperatives merits special note. Their overall debt remained fairly constant, although there was some shifting from longterm to short-term debt. However, they experienced

the largest increase in interest expense, up 24 percent

in 2000. Every cooperative in this group had doubledigit increases in interest expense.

Rice cooperatives, which carry the least amount

of debt, also had a lower interest expense, down 58

percent from 1999. Much of this decline can be attributed to reduced demand for working capital funds.

Their long-term debt actually increased 5 percent, but

overall debt fell 17 percent.

Both the cotton and farm supply cooperative sectors had higher interest expense in 2000 but lower

overall debt. Long-term debt for cotton cooperatives

was pushed up by two cooperatives with additional

financing needs, while declining demand for operating

loans pushed down total outstanding debt. Their interest expense jumped 37 percent, to $16 million.

Farm supply cooperatives were in the opposite

position. Their need for long-term debt declined by

more than their increased need for short-term loans.

Overall debt was cut. Yet, their interest expense

increased 2 percent. Other cooperative groups had

higher interest expense and debt levels.

Interest income was up 22 percent in 2000.

However, nearly 42 percent of that increase was due to

two poultry & livestock cooperatives. For most cooperatives, interest income is a minor revenue source.

Diversified and poultry & livestock cooperatives

account for more than 50 percent of all interest income

for the largest agricultural cooperatives.

Non-operating income and other expenses

include rental income, gain/loss on the sale of fixed

assets, and income or losses associated with joint ventures or unconsolidated subsidiaries. While generally

not related directly to cooperative operations, sometimes these peripheral activities can mean the difference between net gains or losses at the end of the year.

Put another way, 17 cooperatives would either have

shown a net loss (8) or had a larger net loss (9) without

these activities in 2000.

Non-operating income and other expenses fell 61

percent in 2000. Only grain and cotton cooperatives

had higher revenue from these other sources. All the

other commodity groups combined for about a $200

million decline in 2000.

Patronage received by the largest cooperatives

fell to its lowest levels since 1988. With net operating

margins averaging less than 2 percent of total sales,

patronage refunds had a significant impact on the bottom line. However, over the past few years, agricultural markets have been suppressed. Competition keeps

margins slim. These factors have hurt both local and

regional cooperatives. For regionals, the result meant

reduced patronage returned to member locals.

Patronage refunds in 2000 were only 10 percent of

patronage paid in 1997.

Total patronage refunds received by the largest

agricultural cooperatives were $35 million in 2000,

down 31 percent from 1999. The refunds included both

patronage from cooperative banks and other cooperatives. Every commodity group reported lower patronage refunds. Grain cooperatives accounted for nearly

one-half of the total decline.

The net effect of these non-operational activities

pushed net margins down to $455 million. Higher

interest expenses, coupled with declining revenue

from joint ventures, were the main cause in continued

net margin decline in 2000.

The dairy cooperative group had the largest net

margins, 47 percent of the total for the top 100 agricultural cooperatives. The diversified cooperatives were

next, accounting for 29 percent of the top 100 agricultural cooperatives total. Farm supply, poultry & livestock and sugar cooperative commodity groups ended

the year with net losses.

5
Members Receive Higher Patronage

Members received a higher patronage refund,

both in terms of a higher percentage of net margins

and absolute value, in 2000 than in 1999 (figure3).

Despite lower net margins, members received $87 million more in allocated equity than in 1999. Eighty-eight

percent of total net margins werereturned to members

in 2000 versus 60 percent in 1999. All commodity

groups allocated patronage to their members, with the

exception of fruit & vegetable and sugar cooperatives.

If cash is king, then members should have felt

likeroyalty in 2000. Forty-five percent of net margins

were paid in cash in 2000 compared with 32 percent in

1999 (figure 4). That equates to a 21-percent increase in

cash payments. Dividends paid on preferred and other

stock were up 11 percent, to $50 million. These dividends are not directly based on patronage. With the

exception of sugar, all commodity groups paid cash to

their members. Despite net losses, farm supply and

poultry & livestock cooperatives deducted from their

unallocated equity to return cash back to their members. Only three cooperatives use nonqualified, noncash patronage refunds.

Fruit & vegetable cooperatives deducted $34 million from their member deferred equity account while

paying $6 million in cash and allocating $12 million

from current operations. The net result was a deduction of $16 million from members’ equity. These

deferred equity accounts arefrom a few pooling cooperatives that deferred some expenses related to specific

pools that were not closed at that time.

Cotton cooperatives, as a whole, did not retain

any allocated equity. Instead, they paid all their allocated equity in the form of cash patronage refunds.

Similar to the fruit & vegetable cooperatives, their

retained patronage is a negative number due to

deferred expenses of pools not yet closed.

Dairy and diversified cooperatives allocated

more to their members’ accounts and paid more cash

than in prior years. Despite lower net margins, diversified cooperatives paid out more cash and retained

more allocated equity then in 1999. The difference was

made up with deductions in unallocated equity and

some tax benefits.

Although farm supply and poultry & livestock

cooperatives ended with a net loss for the year, members received both cash and non-cash allocated equity.

Most cooperatives had net margins but the few with

net losses were substantial amounts--enough to affect

the totals of that segment. The profitable cooperatives

were able to allocate both cash and non-cash patronage

refunds while the cooperatives with a loss absorbed

them with unallocated accounts.

6

Figure 3—Net magin distribution for top 100 agricultural cooperatives, 1996-2000

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

1996 97 98 99 2000

Prior years restated

Income tax

Dividends

Unallocated

A llocated

Billion dollar
Due to the combined effect of lower margins and

higher allocations, unallocated equity actually was

negative in 2000. It was used to cover loses and allocation shortfalls. Nearly a quarter of the top 100 agricultural cooperatives deducted amounts from these

accounts. Eleven out of 16 cooperatives allocated net

loss to their unallocated account. The other five cooperatives allocated it back to their members as deferred

patronage.

Diversified, farm supply, poultry & livestock and

sugar cooperatives all reduced unallocated accounts,

mostly due to net losses. However, diversified cooperatives as a whole didn’t have a net loss. Several cooperatives used the unallocated account to help pay for a

larger patronage allocation.

The largest cooperatives also ended the year with

a tax benefit, 25 of them had benefits that totaled $93

million. This compares with a total tax liability of $79

million for the other 75 cooperatives. While some of

the tax benefits were due to net losses, seven cooperatives received a benefit by allocating unallocated equity back to members.

Farm supply and poultry & livestock cooperatives received tax benefits due to net losses.

Diversified cooperatives were mixed between allocating their unallocated equity back to members and carrying net losses.

Assets Continue To Expand

Total assets grew 4 percent in 2000. Figure 5 illustrates the change and composition of assets from 1996

to 2000. Table 2 shows the consolidated combined balance sheet for all top 100 agricultural cooperatives,

while appendix tables 10A-18A show the consolidated

balance sheet for each cooperative sector.

Leading the increase were current assets, up $591

million to $14 billion. Yet, most growth came fro m

inventory accumulation and higher accounts receivable. In a stagnant economy,increases in these

accounts can prove to be troubling. Looking at it in a

different light, the average accounts receivable

turnover ratio dropped from 17.5 to 16.8 in 2000. This

indicates that accounts receivable are growing faster in

relation to sales revenue. The average inventory

turnover ratio fell from 26.7 to 22.9, indicating they

were expanding faster than sales, not a good sign for

marketing cooperatives.

Cotton cooperatives had fewer current assets due

to lower inventory levels. Interestingly, the cumulative

sales figures were up and inventory was down for the

cotton cooperatives. However, the average inventory

turnover was down. The larger cotton cooperatives

were able to control their inventory better then the

smaller ones. In this sector, inventory contributes as

much as 57 percent to current assets.

7

Figure 4—Allocated patronage refunds for top 100 agricultural cooperatives, 1996-2000

1.2

1

0.8

0.6

0.4

0.2

0

1996 97 98 99 2000

Nonqualified non-cash

Cash patronage

Qualified noncash

Prior years restated

Billion dollar
8

Table 2—Combined Balance Sheet for Top 100 Agricultural Cooperatives, 1999-2000

Percent

2000 1999 Change change

——————————————$1,000 ————————————

Assets

Current Assets

Cash $ 831,570 $ 897,744 $ (66,174) -7.4

Accounts Receivable 6,084,896 5,688,296 396,600 7.0

Inventory 6,216,827 5,970,359 246,468 4.1

Other Current Assets 1,088,555 1,074,468 14,087 1.3

————— ————— ————— — —

Total Current Assets 14,221,848 13,630,867 590,981 4.3

Investment

Cooperative Banks 358,996 338,887 20,109 5.9

Other Cooperatives 1,880,531 1,713,491 167,040 9.7

Other Investments 2,004,331 1,880,291 124,040 6.6

————— ————— ————— — —

Total Investments 4,243,858 3,932,669 311,189 7.9

Net PP&E 8,741,537 8,622,080 119,457 1.4

Other Assets 2,574,725 2,403,178 171,547 7.1

————— ————— ————— — —

Total Assets 29,781,968 28,588,794 1,193,174 4.2

Liabilities

Current Liabilities

Total Short-Term Debt 3,717,556 3,264,031 453,525 13.9

Member Liabilities 2,000,570 1,723,880 276,690 16.1

Other Current Liabilities 1,971,214 1,576,405 394,809 25.0

————— ————— ————— — —

Total Current Liabilities 11,290,085 10,258,947 1,031,138 10.1

Long-Term Debt Less Current Portion 6,325,232 6,482,164 (156,932) -2

Other Liabilities and Deferred Credits 1,223,722 1,200,551 23,171 1.9

Total Non-current Liabilities 7,548,954 7,682,715 (133,761) -1.7

————— ————— ————— — —

Total Liabilities 18,839,039 17,941,662 897,377 5.0

Minority Interest 888,238 776,512 111,726 14.4

Member Equity

Preferred Stock 1,772,232 1,664,749 107,483 6.5

Common Stock 735,869 714,553 21,316 3.0

Equity Certificates and Credits 5,771,975 5,646,451 125,524 2.2

Unallocated Capital 1,774,615 1,844,867 (70,252) -3.8

————— ————— ————— — —

Total Equity 10,054,691 9,870,620 184,071 1.9

————— ————— ————— — —

Total Liabilities and Equity 29,781,968 28,588,794 1,193,174 4.2
Accounts receivable for dairy cooperatives drove

up current assets. Accounts receivable comprise 59

percent of these cooperatives’ total current assets in

2000, up from 56 percent in 1999. The number of times

accounts receivable turned over dropped from 15.5 in

1999 to 13.8 in 2000.

Diversified cooperatives also saw their accounts

receivable push up current assets. However, their average turnover was up slightly, due mostly to their

increased sales.

The inventory levels for the fruit & vegetable

cooperatives in 2000 were up 14 percent from 1999.

Inventory plays a major role in the makeup of current

assets for these cooperatives, encompassing 61 percent

of the total. Yet, higher sales lifted their inventory

turnover ratio from turning over 14.8 times in 1999 to

15 times in 2000.

Farm supply cooperatives had an increase in all

their current asset categories. This would seem especially encouraging, given that the largest jump was in

cash account. However, the cash reserve buildup was

mostly from liabilities owed to members and eventually will need to be paid off. Given the jump in sales for

the cooperatives, it was no surprise to see the levels of

inventory and accounts receivable increase in the same

proportion, leaving their average turnover ratios relatively unchanged from 1999.

Grain cooperative results were similar to those of

farm supply cooperatives, except that grain cash

accounts dropped. However, the grain cooperative

accounts receivable jumped higher than sales, causing

a drop in their average turnover ratio from 23.7 times

in 1999 to 20.8 times in 2000. The inventory levels

remained fairly constant.

Current assets for poultry & livestock cooperatives were boosted by an increase in accounts receivable. Yetinrelation to the amount of sales, the

accounts receivable did not increase as much. This is

illustrated by the accounts receivable turnover ratio,

which jumped from turning over 37 times in 1999 to

44.6 times in 2000.

Rice and sugar cooperatives would have found

themselves with similar circumstances, had it not been

for cash accounts. Sales for both sectors fell and they

9

Figure 5—Assets for top 100 agricultural cooperatives, 1996-2000

35

30

25

20

15

10

5

0

Other assets

Net pp&e

Total

investments

Total current

assets

1996 97 98 99 2000

Prior years restated

Billion dollar
responded with smaller accounts receivable. However,

sugar cooperatives boosted their cash balances

through short-term loans that increased their current

assets 12 percent. Cash balances for rice cooperatives

declined 1 percent. Lower sales left inventory unsold

for both cooperative types and their turnover dropped.

Accounts receivable dropped in relation to sales.

Investments by Cooperatives

Investments increased 8 percent, to $4 billion, in

2000. The majority of the increase occurred with

investments in other cooperatives and cooperative

banks. Cooperative investment increased $187 million

while investment in non-cooperative enterprises

increased $124 million.

Farm supply and diversified cooperatives led the

increase in investment in other cooperatives. These

two sectors accounted for 90 percent of the total

increase in cooperative investment. Farm supply cooperatives increased investments in cooperative banks

and cooperatives in which they have less than 20 percent ownership, most likely retained patronage fro m

regionals. Total cooperative investment for farm supply cooperatives in 2000 was $589 million.

Diversified cooperatives increased their ownership in other cooperatives by 9 percent, to $1.1 billion.

Unlike farm supply cooperatives, most of the increase

was due to cooperative joint ventures between two or

more cooperatives.

Overall, investments fell 3 percent for cotton

cooperatives. However, they increased cooperative

investment, most notably in cooperative banks, which

increased 19 percent, to $17.6 million. The higher

investment in cooperatives by the cotton group represented larger loans with the cooperative bank.

Total investments for dairy cooperatives

increased 4 percent, to $1.1 billion. Eighty-five percent

of the increase was in non-cooperative businesses--

mostly joint ventures in dairy product manufacturing

plants.

Poultry & livestock cooperatives had the greatest

increase in non-cooperative investment, up 58 percent,

to $168 million. These investments also represented 97

percent of total investments.

Nearly three-quarters of the $29 million increase

in grain cooperative investments was made in noncooperatives. The $7 million increase in cooperative

investments was retained patronage from larger

regional cooperatives.

Fruit & vegetable cooperatives lowered their total

investments by 4 percent. All areas of investment were

down in 2000.

Rice cooperative investments were down 3 percent, mostly due to non-cooperative investment. These

investments fell $1.3 million, or 7 percent. The only

cooperative investments were with cooperative banks,

up 2 percent, to $15.5 million.

Sugar cooperatives’ increased investment was

due to joint ventures in non-cooperative businesses.

These investments were up $3 million, or 4 percent.

Net fixed assets increased 1 percent, to $8.7 billion. Some $1.3 billion worth of fixed assets were purchased in 2000 compared with $1.2 billion in 1999.

Farm supply, poultry & livestock and sugar were the

only commodity groups to decrease the amount of net

fixed assets held.

Farm supply cooperatives had the largest decline

in their net fixed assets, down 7 percent, to $1.3 billion.

Fixed asset purchases during the past few years have

indicated that the net losses had a major impact on

maintaining their asset base. Purchases of fixed assets

fellfrom $315 million in 1997 to $109 million in 2000.

Poultry & livestock cooperatives were in a situation similar to that of farm supply cooperatives. A few

years of net losses pushed down new purchases of

fixed assets, which declined 3 percent in 2000.

Despite suffering net losses since 1998, sugar

cooperatives expanded their fixed assets throughout

that time. However, in 2000 net fixed assets were down

0.3 percent.

Cotton cooperatives had the largest percentage

increase (24 percent) in net fixed assets, reaching $176

million for 2000.

Dairy, diversified, fruit & vegetable, grain and

rice cooperatives all had between 2- and 5-percent

increases in their net fixed assets.

Higher Operating Loans 

Increase Liabilities

Total liabilities increased $897 million, up 10 percent from 1999. Most were in current liabilities, up $1

billion to $11.3 billion (figure 6). A majority of cooperatives relied more on short-term debt to help finance

their operations in 2000. This can best be illustrated by

looking at a combined consolidated statement of cash

flow in table 3. Cash provided by operations was

lower; there were fewer investments (fixed assets);

total borrowings were down; yet short-term borrowing

was up to help finance higher inventories and

accounts receivable.

10
Short-term debt jumped $454 million in 2000,

with most of the increase borrowed from commercial

banks. Current portion of long-term debt fell due to

declining long-term debt. Cooperative banks provided

the largest source of working capital. However, commercial banks are increasing their loan portfolio with

cooperatives.

Cooperative bank loans increased 2 percent in

2000, to just over $1.3 billion. However, as noted earlier, most commodity groups are using cooperative

banks less. Commercial bank loans to top 100 agricultural cooperatives jumped 42 percent, to just under

$1.3 billion. Bank loans, both cooperative and commercial, accounted for the majority of cooperative shortterm financing, with 70 percent of the total short-term

debt.

Cotton cooperatives used a mix of different

sources for short-term financing, including cooperative

banks and commercial banks. One cotton cooperative

issued commercial paper. Most cotton cooperatives use

Federal Government sources to help fund commodities. Overall, they are using $21 million, or 17 percent

less, to cover their short-term needs. Most of the

declining short-term financing is with cooperative

banks and government sources.

Dairy,fruit & vegetable, grain and rice cooperatives rely mostly on cooperative banks for their short11

Table 3—Consolidated statement of cash flow for top 100 agricultural cooperatives, 1999-2000

Net Net Net Cash Net Change Net Change

Cash Flow Cash Flow Flow in in

Operating Investing Financing Short-term Long-term

Activities Activities Activities (1) Borrowings Borrowings

1999 $1,190,921 $(1,798,167) $776,162 $144,371 $865,213

2000 1,101,374 (1,194,502) 41,505 389,005 (126,084)

Figure 6—Liabilities for top 100 agricultural cooperatives, 1996-2000

20

18

16

14

12

10

8

6

4

2

0

Prior years restated

1996 97 98 99 2000

Other liabilities and

deferred credits

Long-term debt less

current portions

Other cuttent liabilities

Member liabilities

Accounts payable

Total short-term debt

Billion dollar
term funding. Short-term debt for dairy cooperatives

increased 10 percent, to $199 million. Dairy cooperatives relied more heavily on cooperative bank financing, which holds 57 percent of their short-term debt.

However, a few cooperatives are turning to commercial banks.

Co-op Banks Fund Grain Debt

Fruit & vegetable cooperatives saw their shortterm debt jump 28 percent, to $571 million, with cooperative banks holding 53 percent of it. Some fruit &

vegetable cooperatives are using short-term bonds for

working capital.

Cooperative banks fund nearly 75 percent of

grain cooperatives’ short-term debt. The 10-percent

increase in their short-term debt of $329 million can be

attributed to increased cooperative bank loans.

Rice cooperatives carry little debt. They represent

only 2 percent of short-term loans for the top 100 agricultural cooperatives. They almost exclusively rely on

cooperative banks for their loans. In 2000, they had

short-term loans totaling $79 million, 29 percent less

than in 1999.

Diversified cooperatives hold 42 percent of the

top 100 agricultural cooperatives’ total short-term

debt. That debt increased 10 percent, to $1.5 billion,

and the cooperatives relied more heavily on commercial banks. Commercial sources jumped 39 percent, to

$818 million, representing 65 percent of total commercial bank borrowing among the top 100 agricultural

cooperatives.

Most farm supply cooperatives relied heavily on

cooperative banks while others used several different

sources to finance their short-term needs. Commercial

banks and bond issuances are becoming the staple for

short-term financing for a few farm supply cooperatives. The amount of debt held by cooperative banks

fell 29 percent in 2000, while the short-term debt

jumped 20 percent, to $263 million.

Losses from operations pushed short-term debt

for poultry & livestock cooperatives up 54 percent, to

$299 million, most of it borrowed from commercial

banks.

Sugar cooperatives saw their short-term debt

increase 18 percent, to $267 million. However,the

increase is due to government loans, which accounted

for 52 percent of all short-term debt in 2000, up from 8

percent in 1999. All other sources of short-term funding were down.

Accounts payable dropped 3 percent, to $3.6 billion. Liabilities owed to members jumped 16 percent,

to $2 billion. These member liabilities include cash

payments, dividends, revolving equity (declared but

not yet paid), pooling payments and other member

credits. However, 48 percent of the total increase was

caused by a single cooperative.

Diversified Co-op Liabilities

Diversified cooperatives carry the largest amount

of total liabilities. However, in 2000, they had a decline

of 10 percent in accounts payable, to $1.6 billion.

Member liabilities increased 6 percent, to $251 million,

mostly due to patronage refunds declared but not yet

paid. Other current liabilities accounted for the largest

amount of increase in current liabilities. This includes

checks written but not yet cashed, accrued expenses,

member prepayments and various other liabilities.

This account reached $1.1 billion in 2000, up 48 percent

from 1999. This increase represented 75 percent of the

total increase in the cooperatives’ current liabilities.

Cotton cooperatives decreased their use of debt,

but other liabilities pushed their current liabilities up 7

percent, mostly in member liabilities. Cotton cooperatives owed their members 96 percent more in 2000

than in 1999, a $28 million increase.

Usually, accounts payable relate to inventory.

W ith higher accounts payable, there usually is a correlation with higher inventory levels. Dairy cooperatives

had a 7-percent increase in accounts payable in 2000,

up $45 million, yet inventories decreased $42 million.

Since portions of inventory are dairy products, the correlation would be with member payables. However,

the sum of accounts payable and member payables

stillincreased $37 million. Also of interest is the low

amount of short-term debt the dairy cooperatives

carry. Some don’t carry any short-term debt, indicating

they might be financing their operations through

accounts payable.

Account and member payables of fruit & vegetable cooperatives, however, were down $18 million,

while inventory levels were up $180 million, or 14 percent. This jump seems to correspond to a 28-percent

hike in their short-term debt, which would imply that

these cooperatives are funding operations with loans.

The farm supply cooperative group was strongly

influenced by one cooperative that changed its current

liability side of the combined balance sheet. The

increase in member pre-payments pushed member liabilities up $203 million, to $219 million, in 2000.

Grain and rice cooperatives were more typical.

Current liabilities increased much like current assets.

Grain cooperatives used short-term debt, accounts

receivable and member liabilities as well as cash-on12
hand to fund their current operations. These four

accounts increased between 8 and 10 percent, similar

to the 8-percent increase in total current assets.

On the other hand, rice cooperatives acquired

cash through operations and paid down their debts.

Member liabilities and accounts payable were used to

help fund the current operations. Accounts payable

were up 12 percent, to $32 million, and member liabilities increased 34 percent, to $43 million in 2000. Using

these funds meant rice cooperatives needed fewer

loans to help fund operations.

Finally, sugar cooperatives used both short-term

debt and member liabilities to help fund their operations. The increase in inventory was partly financed

with government loans and member liabilities. Pooling

liabilities were up 44 percent, to $71 million, in 2000.

The combined effect left considerable cash on hand

and allowed them to pay down some of their accounts

payable.

Long-term Debt Declines

Total net long-term debt dropped 2 percent, to

$6.3 billion. Most of the decline was attributed to

diversified and farm supply cooperatives. While cooperative banks held l5 percent less debt in 2000 than in

1999, they still played an important role in cooperative

finance. Cooperative banks and debt issued by the

cooperative accounted for 77 percent of total outstanding long-term debt.

Diversified cooperatives ended 2000 with $143

million less in long-term debt, mostly loans from both

cooperative and commercial banks. Diversified cooperatives used more self-financing through issuing

bonds and using insurance companies for their longterm needs. Farm supply cooperatives used $109 million, or 13 percent less debt, in 2000. Debt from every

source declined.

Cotton, fruit & vegetable and grain cooperatives

relied heavily on cooperative banks for long-term

funding. Cotton cooperatives used cooperative banks

for 96 percent of their long-term funding needs, an 18-

percent increase, to $78 million, in 2000. Grain cooperatives acquired 81 percent of their total long-term debt

from cooperative banks, up $14 million from 1999.

Fruit & vegetable cooperatives used cooperative banks

for 61 percent of their long-term financing, which

remained relatively unchanged at $1.4 billion, in 2000.

Dairy cooperatives used 1 percent less total longterm debt in 2000 due to bond retirement. Bond financing was down 14 percent, to $318 million. However,

bonds still represented 50 percent of their outstanding

long-term debt. Cooperative banks provided 41 percent of the other financing for dairy cooperatives, up

$38 million to $260 million in 2000.

For rice cooperatives, debt use was up 5 percent,

to $70 million. Their source of that debt is noteworthy.

In 1999, cooperative banks funded 72 percent of rice

cooperatives’ long-term financing. But by 2000, that

percentage fell to 20 percent, with bond financing used

as a replacement source of funds. In 1999, bonds represented only 1 percent of the debt, but in 2000 they represented 35 percent.

Sugar cooperatives used less debt in 2000 than in

1999. Total long-term debt was down 4 percent, to $512

million.

Minority interest for the top 100 agricultural

cooperatives was up 14 percent, to $888 million in

2000. This was due to several diversified cooperatives

forming joint ventures, which accounted for 96 percent

of the total increase. Seventy-three percent of the

minority interest is held by just three cooperatives in

different commodity groups.

Equity Continues To Grow

The top 100 agricultural cooperatives’ total equity grew 2 percent in 2000, reaching a record $10 billion

(figure 7). Member certificates, preferred stock and

common stock increased $254 million to $8.3 billion.

On the other hand, unallocated equity fell 3 percent, to

$1.8 billion. Lower margins and higher patronage payments to members prompted the decline in unallocated equity.

For dairy, grain and rice cooperatives, 2000 was a

successful year. Both member equity and unallocated

equity gre w. Dairy cooperatives had 4 percent more

total equity in 2000 than in 1999. Total equity for grain

and rice increased 3 percent. Most of the increase fro m

these three groups was in unallocated equity.

Diversified, farm supply and sugar cooperatives

had larger amounts of member equity but a decreased

value of unallocated equity. Only diversified cooperatives ended the year with net margins, while the other

two commodity groups had net losses. Diversified

cooperatives used unallocated accounts to pay for

some allocations and in a few cases to cover losses.

Their unallocated equity fell 8 percent, to $525 million,

while their allocated equity was up 2 percent, to $2.7

billion.

Farm supply and sugar cooperatives ended the

year with net losses absorbed by unallocated accounts.

Their unallocated equity was down 14 percent and 22

13
percent, respectively. Farm supply cooperatives’ allocated equity was up 12 percent, to $1.4 billion. For

sugar cooperatives it was up 6 percent, to $579 million.

Cotton cooperatives paid their members $9 million in past allocations. The unallocated account was

up $6 million, or 24 percent, in 2000. Between 1996 and

1999, unallocated equity fell 56 percent.

Fruit & vegetable cooperatives had declining values in both allocated and unallocated equity, even

though they ended the year with net margins. Most of

the lower allocated equity accounts were due to

revolving out equity. This resulted in a 1-percent, or

$10 million, decline in allocated equity. The declining

unallocated account was caused by two cooperatives

writing off losses, resulting in a 1-percent drop in unallocated equity.

Poultry & livestock cooperatives ended the year

with a net loss, most of it absorbed by their unallocated equity accounts. Unallocated equity fell 31 percent,

to $71 million, in 2000. Allocated equity fell 3 percent,

to $229 million.

Performance Continues To Erode

Average performance measures for the top 100

agricultural cooperatives continued to deteriorate in

2000. Tools developed to analyze the cooperatives’

financial information include several performance

measurements or ratios found in most financial textbooks. A list of ratios for all cooperatives by sector is

presented in table 4.

The current and quick ratios examine cooperative

liquidity. Figure 8 illustrates that the averages eroded

slightly in 2000. The current ratio fell from 1.40 to 1.37

between 1999 and 2000. The quick ratio fell from 0.78

to 0.76 during the same period. Liquidity declined

because of lower cash flows from operations.

Cooperatives needed to acquire working capital loans

to help fund operations, thus a larger increase in current liabilities than in current assets.

Leverage ratios show the risk associated with

financing and the cooperative’s ability to meet its

obligations. The debt-to-asset ratio illustrates how

assets are financed. In 2000, this average ratio was

0.61, up slightly from 0.60 in 1999 (figure 9). This

means that 61 percent of the cooperatives’ assets are

owned by outside interests. Examining long-term

financing, we focus on the long-term debt-to-equity

ratio (figure 10). This ratio was virtually unchanged

from 0.60 in 1999 to 0.61 in 2000.

What the combined effect of lower liquidity and

stable leverage ratios illustrates is the change in the

term structure of that debt. In other words, cooperatives appear to be shifting their debt loads from long14

Figure 7—Equity for top 100 agricultural cooperatives, 1996-2000

12

10

8

6

4

2

0

Prior years restated

1996 97 98 99 2000

Unallocated capital

Equity certificates

and credits

Common stock

Preferred stock

Billion dollar
15

Table 4—Selected financial ratios for top 100 agricultural cooperatives in 2000

Current Quick Debt Long-Term Times Local Fixed Gross Net Return Return

Ratio Ratio To Debt Interest Assets Assets Profit Operating O n O n

Assets To Earned Turnover Turnover Margin Margin Total Members

Equity Assets Equity

------------Ratio------------ ------------Times------------ ------------Percent------------

All Cooperatives 1.37 0.76 0.61 0.61 3.31 2.66 14.45 16.47 1.34 3.73 9.41 

Cotton 1.44 0.69 0.56 0.42 3.25 2.64 22.40 15.49 5.20 9.77 21.59 

Dairy 1.30 0.93 0.60 0.34 9.12 4.52 26.09 12.88 1.64 6.24 15.93 

Diversified 1.25 0.84 0.72 1.47 1.62 2.18 10.28 10.36 0.63 1.32 3.47 

Fruit & Vegetable 1.44 0.61 0.71 0.97 1.42 1.88 9.67 27.15 0.47 1.59 7.10 

Farm Supply 1.41 0.61 0.58 0.53 2.39 1.99 10.94 16.74 1.52 3.62 7.43 

Grain 1.27 0.67 0.58 0.46 1.88 2.30 8.53 13.25 1.25 3.41 8.70 

Poultry & Livestock 2.06 1.73 0.63 0.75 1.13 3.48 45.42 6.14 1.60 1.93 1.66 

Rice 1.68 0.77 0.50 0.34 3.98 2.29 5.63 29.38 2.10 5.06 10.70 

Sugar 1.15 0.53 0.67 1.09 0.92 0.86 1.63 26.03 (0.40) (0.33) (2.16)

Figure 8—Current and quick ratio for top 100 agricultural cooperatives, 1996-2000

2.0

1.5

1.0

0.5

—

Prior years restated

1996 97 98 99 2000

Current

Quick
term to short-term. Expansion of fixed assets slowed

while the need for working capital increased. Shortterm financing bridged this need.

Leveraging Risk to Business

While leveraging a cooperative is not necessarily

bad, it puts more risk on the business, mostly fro m

loan defaults. An examination of the times-interestearned ratio provides a quick look at that scenario (figure11). This ratio looks at the number of times interest

expense is covered by net margins. This ratio has fallen

from 4.7 to 3.3 in 2000, the lowest level in the past 5

years. While there is no current crisis, cooperatives are

leveraging themselves to fund operations while the

revenue from those operations continues to shrink. If

thistrend continues, there could be trouble ahead

when some cooperatives find it hard to service their

debt.

Activity ratios look at how well a cooperative

uses its assets. These ratios are holding steady for

cooperatives. Local-asset-turnover, calculated by taking total revenue divided by local assets, was constant

at 2.7 in 2000. This represents how much revenue is

generated by each dollar invested in local assets (total

assets less investment in other cooperatives).

Investments in other cooperatives are not considered

revenue-generating assets. The investment is made

due to business conducted with the individual cooperative and excluding this provides a better understanding of how well the cooperatives’ working assets are

performing.

Fixed-asset-turnover increased slightly from 14.3

to 14.4 in 2000, which says cooperatives are still using

fixed assets efficiently. However, this doesn’t tell the

whole story. An increase could indicate higher sales or

lower values of fixed assets. A closer look shows cooperatives purchasing less fixed assets and the average

liferemaining on the fixed assets falling. This would

imply that assets are getting older. Figure 12 illustrates

activity ratio for the top 100 agricultural cooperatives

from 1996 to 2000.

These activity ratios indicate that cooperatives

slowed their investment in fixed assets and instead

invested, either voluntarily or involuntarily,in

accounts receivable and inventory as a response to

higher revenue.

Profitability ratios, while limited as an absolute

indicator,provide a view of financial strength for the

cooperative. Gross profit margins jumped from 15.9 to

16.5 in 2000, continuing the upwardtrend since 1996.

However, net operating margins fell from 1.6 in 1999 to

1.3 in 2000. Figure 13 shows these widening efficiency

ratios and some inefficiency in handling the higher

volume of sales.

16

Figure 9—Debt-to-asset ratio for top 100 agricultural cooperatives, 1996-2000

0.70

0.60

0.50

0.40

0.30

0.20

0.10

—

1996 97 98 99 2000

Prior years restated

Ratio
17

Figure 10—Long-term-debt-to-equity for top 100 agricultural cooperatives, 1996-2000

0.8

0.6

0.4

0.2

—

1996 97 98 99 2000

Prior years restated

Ratio

Figure 11— Times-interest-earned ratio for top 100 agricultural cooperatives, 1996-2000

6

5

4

3

2

1

0

1996 97 98 99 2000

Prior years restated

Ratio
Return on total assets--calculated as net margins

plus taxes and interest expense divided by total

assets—fell from 4.5 in 1999 to 3.7 in 2000. This ratio

focuses on the operation itself without identifying how

the cooperative was financed. This reflects lower efficiencies in cooperatives’ use of total assets in generating net margins.

Return on member equity looks at the return on

member investment after all expenses have been

deducted, including taxes and interest. After increasing for a few years, the return dropped from 13.8 in

1998 to 9.4 in 2000.

Figure 14 illustrates the movement of these profitability ratios from 1996 to 2000. They indicate that

despite higher sales, cooperatives are finding that their

operations cannot efficiently handle increased sales.

Operations are not generating enough funds and the

continued reliance on borrowed funds could cause

problems down the road. Other revenue indirectly

related to the cooperatives’ business is not bringing in

as much revenue as in 1999 while expenses associated

with indirect activities have increased. Cooperatives

are investing less for the future and focusing energies

on keeping their operations funded.

Less Liquidity in Cotton

Cotton cooperatives were less liquid in 1999 than

in 2000. Higher sales did not generate enough cash

flow to fund current operations so cooperatives had to

rely more on members to fund operations. The dramatic drop in their average liquidity ratios illustrates this.

Their current and quick ratios fell from 1.64 and 0.83 in

1999 to 1.44 and 0.69 in 2000. They acquired more

long-term debt to fund their fixed assets. Their average

long-term debt-to-equity ratio jumped from 0.37 to

0.42. Higher levels of fixed assets helped the cotton

cooperatives operate moreefficiently and generate

higher returns to their members. Fixed asset turnover

was up from 19.9 times in 1999 to 22.4 times in 2000.

Profit also was up, with average net operating margins

up to 5.2 percent from 4.25 percent in 1999. These were

the highest returns on revenue of all commodity

groups. Lower interest rates and higher debt illustrates

the benefits from leveraging. Average return on total

assets was 9.8 percent, which awarded the difference

between interest and the total return back to members.

Return on members’ equity was up from 19.9 in 1999

to 21.6 in 2000.

Dairy cooperatives found their average liquidity

up slightly, with the current ratio increasing from 1.28

to 1.30 and their quick ratio from 0.88 to 0.93 between

18

Figure 12—Local and fixed asset turnover ratio for top 100 agricultural cooperatives, 1996-2000

20

15

10

5

—

Prior years restated

1996 97 98 99 2000

Fixed asset

turnover

Local asset

Times
19

Figure 13—Gross and net operating margin percentage ratio for top 100 agricultural cooperatives, 1996-2000

18

15

12

9

6

3

—

Prior years restated

1996 97 98 99 2000

Gross margin

Net operating

margin

Percent

Figure 14—Return on assets and equity for top 100 agricultural cooperatives, 1996-2000

18

15

12

9

6

3

—

Prior years restated

1996 97 98 99 2000

Return on equity

Return on assets

Percent
1999 and 2000, respectively. However, this is misleading due to the major influence from one cooperative.

W ithout it, the average liquidity ratios decline.

Collectively, dairy cooperatives had a larger increase in

current liabilities than in current assets. Cash flow

from operations was down and the cooperatives needed more short-term debt along with other current liabilities to fund the operations. This, in effect, pushed

down the liquidity for most dairy cooperatives.

However, their leverage remained relatively

steady.Average debt-to-asset ratio inched down, fro m

0.61 to 0.60, and average long-term debt-to-equity was

up from 0.33 to 0.34. The average times-interest-earned

ratio was 9.12 in 2000, down from 12.26 in 1999.

However, this was still the highest of all commodity

sectors. The average turnover ratios are smaller, mostly due to lower sales revenue. Yet, the average gross

margin percent increased from 11.9 to 12.9 in 2000.

This boosted the profitability ratios above the 1999

level. Net operating margins were up 0.07, to 1.64.

W ith a slightly higher leverage position, a higher

return on total assets pushed up return on members’

equity from 14.04 to 15.93.

Performance M easures Fall

Diversified cooperatives saw their performance

measures fall in 2000. Liquidity is down mostly due to

higher short-term debt. These cooperatives used much

of their cash balances to pay down long-term debt.

Short-term loans were used to help cover the shortfall

in cash generated by operations. This pushed up current liabilities more than current assets. Thus, the current ratio fell from 1.34 in 1999 to 1.25 in 2000.

The average long-term debt-to-equity ratio is up

due mostly to one cooperative. The other diversified

cooperatives all had lower amounts. Their times-interest-earned ratio of 1.62 was down from 1.87 in 1999,

due to lower net margins and higher interest expense.

Higher sales pushed up their turnover ratios of total

and fixed assets. Total asset turnover ratio was up

from 1.9 in 1999 to 2.2 in 2000 while the fixed asset

ratio was up from 9 to 10.3. Diversified cooperatives

hurt their members by leveraging their financing in

2000. Lower net margins, down from 1.15 to 0.63,

pushed average returns on total assets from 1.83 in

1999 to 1.32 in 2000. Because higher debt loads pushed

up interest expense, return on member equity was

down from 5.83 in 1999 to 3.47 in 2000.

Fruit & vegetable cooperatives were similar to

the diversified cooperatives. Liquidity was lower due

to higher short-term debt. Their average long-term

debt-to-equity was up from 0.94 in 1999 to 0.97 in 2000,

mostly due to a single cooperative. Without that cooperative’s impact, long-term debt would have remained

steady. However, an increase in short-term debt meant

higher total debt and higher interest payments and

increased leverage. Net operating margins were down

from 0.91 in 1999 to 0.47 in 2000. Again, higher leverage with lower margins pushed returns to member

equity down to 7.1 from 9.79 in 1999.

The operations for farm supply cooperatives generated positive cash flows that left their cash balances

higher in 2000. Yet, their overall liquidity fell due to

member prepayments that substantially affected their

current liabilities. The average current ratio for farm

supply cooperatives fell from 1.48 in 1999 to 1.41 in

2000. There was less investment in fixed assets in 2000

that helped improve their leverage ratios. Long-term

debt-to-equity fell from 0.56 to 0.53 in 2000. Having

lower fixed assets and higher revenue meant higher

fixed asset turnovers while local asset turnovers

remained unchanged. The average fixed asset turnover

increased from 8.8 to 10.9 in 2000.

Overall, there was a net loss for farm supply

cooperatives, because a few cooperatives had substantial losses. However, most farm supply cooperatives

ended the year with positive margins so their average

profitability ratios were up. Net operating margins

were up from 1.1 in 1999 to 1.52 to help lift the average

return on total assets from 3.46 to 3.62. Lower leverage

also helped members gain more on their investment.

Return on member equity was up from 6.73 to 7.43.

The financial performance of grain cooperatives

remained relatively unchanged between 1999 and

2000. Liquidity and debt structure held steady. The

only concern was on the operations side. Lower margins coupled with higher interest expense dropped the

times-interest-earned ratio from 2.87 in 1999 to 1.88 in

2000. The average earnings were still able to cover the

obligatory interest payments, but concern continues

over the decline of this value. This decline also carried

over to the profitability of the grain cooperatives. The

average return on total assets was down from 4.47 to

3.41 in 2000. The leveraging effect pushed down the

return on members’ equity from 10.88 to 8.70.

Poultry & livestock cooperatives as a whole paid

their members a higher proportion of their sales in the

form of cost of goods sold. Cash flows and margins

were down. Debt was used to fund operations and

reflected on both the liquidity and leverage ratios. The

average current ratio was down from 2.44 to 2.06 while

the average quick ratio was down to 1.73 from 2.06 in

20
1999. Despite this drop, these cooperatives still maintain the highest liquidity of any commodity group in

the top 100.

Heavy Debt Concerns

The biggest concern for these cooperatives is that

some are carrying heavy debt and are highly leveraged. Long-term debt-to-equity was up to 0.75 fro m

0.60 in 1999. The times-interest-earned ratio was 1.13,

which left little room beyond interest payments. The

turnover ratios held steady with sales, but profit ratios

took a hard hit. The average net operating margins

were down from 7.61 in 1999 to 1.60 in 2000. This

affected return on total assets, which fell from 9.84 to

1.93. The leveraged effect pushed down return on

member equity to 1.66 from a 5-year high of 14.27 in

1999.

Operations for rice cooperatives held fairly

steady while they improved their financial position.

Cash flow from operations lowered borrowing needs

and other sources were used to help fund operations.

Their average liquidity ratios were up in 2000, with the

current ratio up from 1.56 to 1.68 and the quick ratio

up from 0.73 to 0.77. An increase in their long-term

debt kept leverage ratios from declining. Debt-to-asset

ratiofellfrom 0.51 in 1999 to 0.50 in 2000 but long-term

debt-to-equity increased from 0.32 to 0.34 during the

same period. The changing structure of their shortterm financing from debt to other sources dropped

their interest expense and thus improved the timesinterest-earned ratio from 2.08 in 1999 to 3.98 in 2000.

Like grain cooperatives, the performance measurements of sugar cooperatives were comparatively

steady between 1999 and 2000. There was some decline

in their liquidity due to lower cash generated fro m

operations. Short-term debt and member payables provide operating cash and funding for inventory. The

current ratio fell from 1.19 in 1999 to 1.15 in 2000 while

the quick ratio fell from 0.59 to 0.53. Their debt shifted

from long- to short-term as indicated by the relative

lack of movement in the debt-to-asset ratio, while

there was a substantial decline in the long-term debtto-equity ratio between 1999 and 2000. The debt-toasset ratio fell from 0.68 to 0.67. However, long-term

debt-to-equity fell from 1.22 to 1.09.

The main concern facing sugar cooperatives is

generating enough revenue to cover expenses. The

times-interest-earned ratio is 0.92, which means there

weren’t enough margins to cover interest expense.

Losses and low margins caused profitability ratios to

have negative values.

Are Cooperatives Ready for the Future?

Faced with a slow world economy in 2001, U. S.

agricultural exports declined. The surplus of agricultural goods built up over the past few years kept

prices in check. Yet, domestic demand remained

healthy and kept prices for output somewhat buoyant.

Higher costs for farm supplies will result in lower

margins unless cooperatives are able to pass the full

price increases on to their members. Tighter credit

standards along with lower margins will pinch cooperative financing. Overall, the agricultural economy will

shadow the nation’s total economy. Cooperatives, like

any other business sector, will have to tighten their

belts to control costs.

Mergers, consolidations and joint ventures will

continue to provide cooperatives a cheaper way to

access new markets. Adjustments in operations to

lower costs will be driving many decisions in board

meetings and executive offices. Hopefully, cooperatives will be able to adapt to the changing environment

and continue to provide member benefits and position

themselves for the future.

21
22

Appendix

Table 1A—Consolidated statement of operations for cotton cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $1,473,823 $1,180,443 $1,695,838 $1,824,232 $1,692,065

Farm Supply 60,650 53,888 87,167 84,418 50,935

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 1,534,473 1,234,331 1,783,005 1,908,650 1,743,000

Other Operating Revenue 5,586 5,162 5,199 5,328 5,659

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 1,540,059 1,239,493 1,788,204 1,913,978 1,748,659

Cost of Goods Sold 1,404,858 1,121,591 1,649,257 1,765,021 1,592,984

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 135,201 117,902 138,947 148,957 155,675

Expenses

Operating Expenses 80,418 61,479 69,095 80,084 75,625

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 54,783 56,423 69,852 68,873 80,050

Other Revenue (Expenses)

Interest Expense (15,676) (11,401) (20,137) (20,832) (22,320)

Interest Revenue 1,785 1,290 1,876 1,653 2,054

Other Income 1,562 871 419 396 943

Other Expenses - - - (311) (180)

Patronage Revenue 3,419 3,678 1,938 1,899 1,884

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations 45,873 50,861 53,948 51,678 62,431

Non-Operating Revenue (Expenses) - - - - -

======= ======= ======= ======= ======

Net Margins 45,873 50,861 53,948 51,678 62,431

Distribution of Net Margins

Cash Patronage Dividends 16,703 18,643 17,522 28,439 30,243

Retain Patronage Dividends (6,764) 12,280 19,416 11,481 11,372

Nonqualified Non-cash Patronage - - - - -

Dividends 22,380 24,261 16,984 13,996 14,204

Unallocated Equity 13,224 (4,240) 12 (2,553) 6,337

Income Tax 330 (83) 14 315 275

======= ======= ======= ======= ======

Total Distribution 45,873 50,861 53,948 51,678 62,431
23

Table 2A—Consolidated statement of operations for dairy cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $17,438,350 $17,816,967 $17,154,126 $16,222,878 $16,476,585

Farm Supply 133,580 138,033 100,768 161,779 125,427

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 17,571,930 17,955,000 17,254,894 16,384,657 16,602,012

Other Operating Revenue 62,732 56,416 44,227 99,171 134,521

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 17,634,662 18,011,416 17,299,121 16,483,828 16,736,533

Cost of Goods Sold 16,414,963 16,918,073 16,254,305 15,477,305 15,616,880

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 1,219,699 1,093,343 1,044,816 1,006,523 1,119,653

Expenses

Operating Expenses 1,024,750 925,475 836,111 839,412 939,842

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 194,949 167,868 208,705 167,111 179,811

Other Revenue (Expenses)

Interest Expense (59,682) (60,004) (58,675) (56,138) (47,076)

Interest Revenue 9,378 9,808 10,144 9,090 10,223

Other Income 77,559 97,371 143,677 14,143 10,506

Other Expenses (27,116) (24,534) (19,327) (5,962) (8,854)

Patronage Revenue 6,464 9,775 6,057 53,190 32,065

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations 201,552 200,284 290,581 181,434 176,675

Non-Operating Revenue (Expenses) 12,624 10,266 12,955 14,665 12,048

======= ======= ======= ======= ======

Net Margins 214,176 210,550 303,536 196,099 188,723

Distribution of Net Margins

Cash Patronage Dividends 76,786 59,763 71,024 74,606 55,642

Retain Patronage Dividends 73,496 71,258 88,779 41,505 63,121

Nonqualified Non-cash Patronage - - - 726 -

Dividends 941 944 945 951 970

Unallocated Equity 41,324 56,006 91,320 54,109 48,930

Income Tax 21,629 22,579 51,468 24,202 20,060

======= ======= ======= ======= ======

Total Distribution 214,176 210,550 303,536 196,099 188,723
24

Table 3A—Consolidated statement of operations for diversified cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $16,593,880 $15,282,772 $15,323,197 $15,614,098 $18,663,100

Farm Supply 11,417,159 8,737,134 9,068,022 11,754,241 10,866,790

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 28,011,039 24,019,906 24,391,219 27,368,339 29,529,890

Other Operating Revenue 234,060 198,005 283,058 288,184 271,996

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 28,245,099 24,217,911 24,674,277 27,656,523 29,801,886

Cost of Goods Sold 26,612,144 22,732,979 23,153,752 26,015,574 28,184,208

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 1,632,955 1,484,932 1,520,525 1,640,949 1,617,678

Expenses

Operating Expenses 1,351,760 1,296,778 1,185,517 1,232,160 1,230,067

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 281,195 188,154 335,008 408,789 387,611

Other Revenue (Expenses)

Interest Expense (277,329) (224,289) (191,346) (177,411) (192,734)

Interest Revenue 24,382 18,532 26,355 27,633 30,548

Other Income 111,489 135,443 132,487 87,202 128,775

Other Expenses (60,112) (10,017) (29,857) (8,396) (9,102)

Patronage Revenue 6,589 7,406 41,963 138,837 149,686

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations 86,214 115,229 314,610 476,654 494,784

Non-Operating Revenue (Expenses) 45,358 24,947 22,000 (8,584) (5,868)

======= ======= ======= ======= ======

Net Margins 131,572 140,176 336,610 468,070 488,916

Distribution of Net Margins

Cash Patronage Dividends 64,890 44,479 101,974 150,145 109,097

Retain Patronage Dividends 100,814 72,391 137,641 201,331 253,417

Nonqualified Non-cash Patronage - - - 35,001 39,038

Dividends 11,982 11,398 10,567 4,660 4,852

Unallocated Equity (24,725) 1,357 60,080 22,278 24,333

Income Tax (21,389) 10,551 26,348 54,655 58,179

======= ======= ======= ======= ======

Total Distribution 131,572 140,176 336,610 468,070 488,916
25

Table 4A—Consolidated statement of operations for fruit & vegetable cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $6,810,025 $6,599,812 $6,377,419 $6,364,802 $6,269,779

Farm Supply 10,414 8,206 9,124 7,352 7,211

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 6,820,439 6,608,018 6,386,543 6,372,154 6,276,990

Other Operating Revenue 42,282 46,827 53,663 73,405 72,828

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 6,862,721 6,654,845 6,440,206 6,445,559 6,349,818

Cost of Goods Sold 4,818,863 4,845,198 4,731,344 4,806,756 4,792,396

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 2,043,858 1,809,647 1,708,862 1,638,803 1,557,422

Expenses

Operating Expenses 1,847,111 1,692,672 1,528,269 1,443,137 1,433,300

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 196,747 116,975 180,593 195,666 124,122

Other Revenue (Expenses)

Interest Expense (163,270) (142,314) (108,883) (102,729) (114,074)

Interest Revenue 412 414 637 677 1,502

Other Income 19,722 65,740 5,151 5,842 4,043

Other Expenses (2,077) (14,583) (1,376) (1,422) (2,538)

Patronage Revenue 4,779 6,230 7,807 4,150 (2,217)

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations 56,313 32,462 83,929 102,184 10,838

Non-Operating Revenue (Expenses) (28,729) (19,945) - 4,606 4,000

======= ======= ======= ======= ======

Net Margins 27,584 12,517 83,929 106,790 14,838

Distribution of Net Margins

Cash Patronage Dividends 5,869 3,923 7,107 8,213 3,329

Retain Patronage Dividends (21,892) (84,941) 15,981 25,841 7,759

Nonqualified Non-cash Patronage 18,103 17,211 19,358 19,275 18,690

Dividends 7,691 7,015 6,609 6,107 9,561

Unallocated Equity 8,891 34,563 23,484 25,740 (12,743)

Income Tax 8,922 34,746 11,390 21,614 (11,758)

======= ======= ======= ======= ======

Total Distribution 27,584 12,517 83,929 106,790 14,838
26

Table 5A—Consolidated statement of operations for farm supply cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $348,871 $356,993 $457,396 $605,159 $2,570,754

Farm Supply 5,192,278 4,653,714 4,699,982 5,918,732 5,625,325

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 5,541,149 5,010,707 5,157,378 6,523,891 8,196,079

Other Operating Revenue 95,707 77,491 80,451 79,448 101,247

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 5,636,856 5,088,198 5,237,829 6,603,339 8,297,326

Cost of Goods Sold 5,005,744 4,512,739 4,601,357 5,839,652 7,324,292

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 631,112 575,459 636,472 763,687 973,034

Expenses

Operating Expenses 567,253 601,931 530,376 561,862 626,010

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 63,859 (26,472) 106,096 201,825 347,024

Other Revenue (Expenses)

Interest Expense (80,355) (79,138) (77,649) (74,150) (84,822)

Interest Revenue 12,941 14,202 27,858 42,256 35,333

Other Income 11,535 25,907 22,371 18,349 18,009

Other Expenses (12,228) (241) (1,746) (146) (264)

Patronage Revenue 1,722 4,165 6,069 88,316 83,034

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations (2,526) (61,577) 82,999 276,450 398,314

Non-Operating Revenue (Expenses) 1,703 (6,660) (279) (556) 362

======= ======= ======= ======= ======

Net Margins (823) (68,237) 82,720 275,894 398,676

Distribution of Net Margins

Cash Patronage Dividends 11,781 8,337 25,424 108,945 103,389

Retain Patronage Dividends 21,225 16,900 36,359 128,643 265,198

Nonqualified Non-cash Patronage - - - - -

Dividends 6,924 1,081 1,032 1,305 1,750

Unallocated Equity (26,464) (87,230) 10,470 19,565 11,406

Income Tax (14,289) (7,325) 9,435 17,436 16,933

======= ======= ======= ======= ======

Total Distribution (823) (68,237) 82,720 275,894 398,676
27

Table 6A—Consolidated statement of operations for grain cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $ 3,744,735 $3,154,821 $3,855,120 $4,258,833 $4,018,167

Farm Supply 1,450,568 1,975,977 2,392,133 2,378,441 2,216,102

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 5,195,303 5,130,798 6,247,253 6,637,274 6,234,269

Other Operating Revenue 117,874 121,554 116,238 132,305 107,904

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 5,313,177 5,252,352 6,363,491 6,769,579 6,342,173

Cost of Goods Sold 4,832,181 4,794,894 5,863,963 6,301,463 5,909,859

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 480,996 457,458 499,528 468,116 432,314

Expenses

Operating Expenses 415,140 395,718 395,539 371,799 317,614

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 65,856 61,740 103,989 96,317 114,700

Other Revenue (Expenses)

Interest Expense (42,439) (35,405) (32,117) (33,760) (48,005)

Interest Revenue 10,893 11,279 13,078 9,622 6,278

Other Income 31,048 25,448 21,475 8,591 6,047

Other Expenses (1,307) (507) (1,639) (803) (20)

Patronage Revenue 12,410 20,200 32,213 34,614 33,933

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations 76,461 82,755 136,999 114,581 112,933

Non-Operating Revenue (Expenses) (1,204) 268 2,028 88 (144)

======= ======= ======= ======= ======

Net Margins 75,257 83,023 139,027 114,669 112,789

Distribution of Net Margins

Cash Patronage Dividends 18,808 22,592 28,865 27,988 26,748

Retain Patronage Dividends 29,382 43,311 72,223 61,104 71,071

Nonqualified Non-cash Patronage 316 1,843 757 - -

Dividends 40 34 55 88 87

Unallocated Equity 15,894 10,769 24,257 11,426 6,268

Income Tax 10,817 4,474 12,870 14,063 8,615

======= ======= ======= ======= ======

Total Distribution 75,257 83,023 139,027 114,669 112,789
28

Table 7A—Consolidated statement of operations for poultry & livestock cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $2,528,444 $2,487,366 $2,334,415 $2,255,358 $2,029,757

Farm Supply - - - 702,500 577,320

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 2,528,444 2,487,366 2,334,415 2,957,858 2,607,077

Other Operating Revenue 7,839 7,382 6,776 6,211 6,158

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 2,536,283 2,494,748 2,341,191 2,964,069 2,613,235

Cost of Goods Sold 2,445,173 2,267,549 2,325,155 2,763,210 2,363,270

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 91,110 227,199 16,036 200,859 249,965

Expenses

Operating Expenses 109,467 104,502 91,699 189,644 175,617

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins (18,357) 122,697 (75,663) 11,215 74,348

Other Revenue (Expenses)

Interest Expense (41,694) (32,418) (33,129) (31,375) (24,227)

Interest Revenue 19,854 10,721 11,243 20,377 15,371

Other Income (1,810) 14,118 10,974 8,106 5,962

Other Expenses - - (224) (409) (1,886)

Patronage Revenue 4 27 230 12,924 711

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations (42,003) 115,145 (86,569) 20,838 70,279

Non-Operating Revenue (Expenses) (342) (8,406) (45,911) (1,843) (4,330)

======= ======= ======= ======= ======

Net Margins (42,345) 106,739 (132,480) 18,995 65,949

Distribution of Net Margins

Cash Patronage Dividends 3,077 4,481 4,284 8,111 5,722

Retain Patronage Dividends 931 13,702 729 817 (1,724)

Nonqualified Non-cash Patronage - - - - 24,212

Dividends - - 128 119 87

Unallocated Equity (24,810) 50,769 (102,863) 12,963 16,454

Income Tax (21,543) 37,787 (34,758) (3,015) 21,198

======= ======= ======= ======= ======

Total Distribution (42,345) 106,739 (132,480) 18,995 65,949
29

Table 8A—Consolidated statement of operations for rice cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $1,071,349 $1,119,073 $1,167,781 $1,217,314 $1,086,505

Farm Supply - 3,247 2,511 3,397 4,186

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 1,071,349 1,122,320 1,170,292 1,220,711 1,090,691

Other Operating Revenue - 4,846 2,725 9,133 18,085

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 1,071,349 1,127,166 1,173,017 1,229,844 1,108,776

Cost of Goods Sold 768,688 836,702 845,055 912,156 784,814

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 302,661 290,464 327,962 317,688 323,962

Expenses

Operating Expenses 285,002 272,321 295,492 292,252 299,913

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 17,659 18,143 32,470 25,436 24,049

Other Revenue (Expenses)

Interest Expense (2,890) (6,933) (11,971) (18,328) (14,750)

Interest Revenue - - - - -

Other Income 2,590 2,611 1,875 1,840 1,209

Other Expenses (2,848) (908) (1,517) (2,190) (205)

Patronage Revenue - - 185 318 726

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations 14,511 12,913 21,042 7,076 11,029

Non-Operating Revenue (Expenses) - - - - -

======= ======= ======= ======= ======

Net Margins 14,511 12,913 21,042 7,076 11,029

Distribution of Net Margins

Cash Patronage Dividends 6,919 6,890 13,341 - -

Retain Patronage Dividends 331 415 815 - -

Nonqualified Non-cash Patronage - - - - -

Dividends 459 491 527 472 433

Unallocated Equity 5,624 5,389 5,509 4,694 6,965

Income Tax 1,178 (272) 850 1,910 3,631

======= ======= ======= ======= ======

Total Distribution 14,511 12,913 21,042 7,076 11,029
30

Table 9A-Consolidated statement of operations for sugar cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Revenue

Marketing $1,549,901 $1,666,131 $1,504,208 $1,282,654 $1,038,977

Farm Supply 1,808 2,841 5,507 6,379 7,386

------------------- ------------------- ------------------- ------------------- -------------------

Total Sales 1,551,709 1,668,972 1,509,715 1,289,033 1,046,363

Other Operating Revenue 50,457 56,435 54,432 33,591 13,642

------------------- ------------------- ------------------- ------------------- -------------------

Total Operating Revenue 1,602,166 1,725,407 1,564,147 1,322,624 1,060,005

Cost of Goods Sold 1,191,540 1,315,581 1,166,814 995,311 815,417

------------------- ------------------- ------------------- ------------------- -------------------

Gross Margin 410,626 409,826 397,333 327,313 244,588 

Expenses

Operating Expenses 334,450 370,674 325,107 265,920 230,293

------------------- ------------------- ------------------- ------------------- -------------------

Net Operating Margins 76,176 39,152 72,226 61,393 14,295

Other Revenue (Expenses)

Interest Expense (66,068) (62,549) (58,408) (50,324) (18,440)

Interest Revenue 3,202 1,762 2,045 2,063 867

Other Income 2,442 7,433 2,130 1,066 4,835

Other Expenses (26,690) (7,265) (28,335) (16,387) (785)

Patronage Revenue - - - 4,997 2,040

------------------- ------------------- ------------------- ------------------- -------------------

Net Margins from Operations (10,938) (21,467) (10,342) 2,808 2,812

Non-Operating Revenue (Expenses) - - (1,230) (6,929) -

======= ======= ======= ======= ======

Net Margins (10,938) (21,467) (11,572) (4,121) 2,812

Distribution of Net Margins

Cash Patronage Dividends - - - 748 169

Retain Patronage Dividends - - - 1,388 313

Nonqualified Non-cash Patronage - - - 2,247 1,138

Dividends - - - - -

Unallocated Equity (11,452) (22,506) (11,725) (10,728) 1,507

Income Tax 514 1,039 153 2,224 (315)

======= ======= ======= ======= ======

Total Distribution (10,938) (21,467) (11,572) (4,121) 2,812
31

Table 10A—Consolidated balance sheet for cotton cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $24,762 $23,324 $18,381 $45,473 $56,742

Accounts Receivable 100,089 90,933 104,326 93,784 96,374

Inventory 197,590 225,202 223,843 156,790 181,579

Other Current Assets 25,292 20,804 16,902 8,824 12,792

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 347,733 360,263 363,452 304,871 347,487

Investment

Cooperative Banks 17,571 14,745 14,452 16,893 18,371

Other Cooperatives 1,839 949 1,167 1,991 1,248

Other Investments 30,215 35,253 21,319 22,207 25,833

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 49,625 50,947 36,938 41,091 45,452

Net PP&E 175,717 141,744 144,925 168,657 152,181

Other Assets 21,634 15,168 14,732 1,679 1,999

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 594,709 568,122 560,047 516,298 547,119

Liabilities

Current Liabilities

Total Short-Term Debt 167,987 189,177 165,450 88,961 154,314

Accounts Payable 19,969 15,329 20,524 27,495 31,510

Member Liabilities 57,449 29,323 66,319 60,675 55,962

Other Current Liabilities 22,036 16,917 20,213 10,218 12,828

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 267,441 250,746 272,506 187,349 254,614

Long-Term Debt Less Current Portion 81,626 67,824 39,389 72,205 44,597

Other Liabilities and Deferred Credits 6,530 7,350 6,609 5,474 4,300

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 88,156 75,174 45,998 77,679 48,897

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 355,597 325,920 318,504 265,028 303,511

------------------- ------------------- ------------------- ------------------- -------------------

Minority Interest - - - - -

Member Equity

Preferred Stock - - - - -

Common Stock 13 8 8 4,254 4,300

Equity Certificates and Credits 208,364 217,427 207,615 202,470 183,494

Unallocated Capital 30,735 24,767 33,920 44,546 55,814

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 239,112 242,202 241,543 251,270 243,608

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 594,709 568,122 560,047 516,298 547,119
32

Table 11A—Consolidated balance sheet for dairy cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $274,561 $264,712 $251,047 $246,184 $230,696

Accounts Receivable 1,326,294 1,237,338 1,390,099 1,143,927 1,184,021

Inventory 601,270 643,109 571,067 634,164 649,167

Other Current Assets 50,707 56,765 44,314 73,216 51,780

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 2,252,832 2,201,924 2,256,527 2,097,491 2,115,664

Investment

Cooperative Banks 30,473 30,041 30,128 117,175 69,102

Other Cooperatives 132,444 129,172 157,723 387,187 244,410

Other Investments 892,003 853,002 750,960 98,879 66,338

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 1,054,920 1,012,215 938,811 603,241 379,850

Net PP&E 1,211,212 1,153,530 1,005,776 1,099,924 1,080,616

Other Assets 89,429 108,156 74,171 97,718 102,067

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 4,608,393 4,475,825 4,275,285 3,898,374 3,678,197

Liabilities

Current Liabilities

Total Short-Term Debt 198,613 180,097 172,306 271,073 210,241

Accounts Payable 650,364 605,394 626,379 514,708 566,700

Member Liabilities 806,056 814,376 756,426 656,136 678,462

Other Current Liabilities 224,606 211,072 209,658 219,143 239,594

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 1,879,639 1,810,939 1,764,769 1,661,060 1,694,997

Long-Term Debt Less Current Portion 610,645 618,401 606,868 602,741 527,939

Other Liabilities and Deferred Credits 87,438 84,866 78,084 32,439 40,227

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 698,083 703,267 684,952 635,180 568,166

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 2,577,722 2,514,206 2,449,721 2,296,240 2,263,163

------------------- ------------------- ------------------- ------------------- -------------------

Minority Interest 302,628 302,658 302,140 178,925 35,309

Member Equity

Preferred Stock 69,539 71,306 75,128 75,274 63,639

Common Stock 24 24 24 26 26

Equity Certificates and Credits 1,234,671 1,203,866 1,107,265 1,072,004 1,072,931

Unallocated Capital 423,809 383,765 341,007 275,905 243,129

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 1,728,043 1,658,961 1,523,424 1,423,209 1,379,725

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 4,608,393 4,475,825 4,275,285 3,898,374 3,678,197
33

Table 12A—Consolidated balance sheet for diversified cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $91,043 $279,485 $138,727 $97,013 $65,045

Accounts Receivable 2,639,092 2,384,388 2,054,621 2,096,090 2,184,442

Inventory 2,012,895 2,030,450 1,933,855 2,123,005 2,299,258

Other Current Assets 536,541 552,023 422,144 321,018 372,308

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 5,279,571 5,246,346 4,549,347 4,637,126 4,921,053

Investment

Cooperative Banks 93,371 96,598 97,127 128,412 129,490

Other Cooperatives 998,811 906,571 867,782 843,369 725,149

Other Investments 344,829 320,675 187,733 203,019 128,551

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 1,437,011 1,323,844 1,152,642 1,174,800 983,190

Net PP&E 2,535,072 2,474,514 2,438,856 2,326,308 2,220,868

Other Assets 1,443,491 1,333,549 1,090,665 862,299 703,404

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 10,695,145 10,378,253 9,231,510 9,000,533 8,828,515

Liabilities

Current Liabilities

Total Short-Term Debt 1,543,209 1,400,415 844,339 1,074,218 1,260,020

Accounts Payable 1,576,246 1,749,171 1,495,236 1,570,611 1,562,056

Member Liabilities 251,078 236,958 287,138 179,453 182,223

Other Current Liabilities 1,124,036 759,866 745,348 897,514 899,554

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 4,494,569 4,146,410 3,372,061 3,721,796 3,903,853

Long-Term Debt Less Current Portion 2,345,574 2,488,647 2,200,385 1,989,736 1,886,573

Other Liabilities and Deferred Credits 525,006 545,631 528,210 300,370 281,859

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 2,870,580 3,034,278 2,728,595 2,290,106 2,168,432

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 7,365,149 7,180,688 6,100,656 6,011,902 6,072,285

------------------- ------------------- ------------------- ------------------- -------------------

Minority Interest 232,618 125,850 95,398 80,562 70,394

Member Equity

Preferred Stock 140,669 144,053 149,063 691,789 672,740

Common Stock 557,046 538,435 483,937 468,003 433,915

Equity Certificates and Credits 1,999,402 1,953,725 1,965,511 1,400,753 1,241,719

Unallocated Capital 400,261 435,502 436,945 347,524 337,462

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 3,097,378 3,071,715 3,035,456 2,908,069 2,685,836

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 10,695,145 10,378,253 9,231,510 9,000,533 8,828,515
34

Table 13A—Consolidate balance sheet for fruit & vegetable cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $51,130 $113,004 $82,888 $82,449 $87,092

Accounts Receivable 645,958 679,787 648,837 580,277 602,191

Inventory 1,437,258 1,256,848 1,141,275 1,015,241 986,603

Other Current Assets 214,098 185,883 172,243 132,263 134,427

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 2,348,444 2,235,522 2,045,243 1,810,230 1,810,313

Investment

Cooperative Banks 70,048 72,440 80,991 79,350 76,667

Other Cooperatives 18,272 30,550 25,247 46,354 48,035

Other Investments 359,016 363,065 183,816 197,582 202,893

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 447,336 466,055 290,054 323,286 327,595

Net PP&E 1,361,110 1,317,001 1,075,556 1,051,588 1,071,176

Other Assets 288,840 276,682 249,758 150,770 144,382

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 4,445,730 4,295,260 3,660,611 3,335,874 3,353,466

Liabilities

Current Liabilities

Total Short-Term Debt 570,809 444,498 428,736 365,815 413,505

Accounts Payable 400,958 404,358 364,574 305,149 318,386

Member Liabilities 320,558 334,785 435,259 413,281 413,537

Other Current Liabilities 244,402 234,658 206,311 208,166 161,951

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 1,536,727 1,418,299 1,434,880 1,292,411 1,307,379

Long-Term Debt Less Current Portion 1,366,873 1,362,917 937,317 814,164 863,816

Other Liabilities and Deferred Credits 280,908 239,558 211,323 169,506 147,994

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 1,647,781 1,602,475 1,148,640 983,670 1,011,810

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 3,184,508 3,020,774 2,583,520 2,276,081 2,319,189

Minority Interest 43,000 43,000 - - -

Member Equity

Preferred Stock 269,303 261,016 105,361 99,391 92,656

Common Stock 134,125 130,693 136,390 128,704 127,930

Equity Certificates and Credits 552,350 574,829 605,351 597,117 593,539

Unallocated Capital 262,444 264,948 229,989 234,581 220,152

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 1,218,222 1,231,486 1,077,091 1,059,793 1,034,277

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 4,445,730 4,295,260 3,660,611 3,335,874 3,353,466
35

Table 14A-Consolidated balance sheet for farm supply cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $174,087 $47,924 $114,360 $258,768 $277,907

Accounts Receivable 537,848 479,504 418,985 634,725 692,577

Inventory 803,174 720,635 646,527 680,153 749,607

Other Current Assets 52,333 49,314 52,924 150,810 316,128

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 1,567,442 1,297,377 1,232,796 1,724,456 2,036,219

Investment

Cooperative Banks 58,082 37,554 35,117 53,862 52,849

Other Cooperatives 531,275 454,049 447,770 509,786 437,871

Other Investments 60,519 75,309 72,859 124,470 68,322

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 649,876 566,912 555,746 688,118 559,042

Net PP&E 1,292,253 1,386,811 1,353,776 1,215,745 1,069,416

Other Assets 181,936 169,457 164,024 145,342 175,939

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 3,691,507 3,420,557 3,306,342 3,773,661 3,840,616

Liabilities

Current Liabilities

Total Short-Term Debt 262,919 218,845 184,183 362,768 448,673

Accounts Payable 498,226 468,263 426,107 532,369 550,917

Member Liabilities 219,130 15,733 31,669 117,351 172,556

Other Current Liabilities 97,857 96,891 95,933 71,629 86,865

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 1,078,132 799,732 737,892 1,084,117 1,259,011

Long-Term Debt Less Current Portion 712,522 821,073 686,824 673,151 617,162

Other Liabilities and Deferred Credits 162,414 151,659 147,917 182,654 174,866

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 874,936 972,732 834,741 855,805 792,028

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 1,953,068 1,772,464 1,572,633 1,939,922 2,051,039

Minority Interest 7,693 7,444 7,121 6,011 6,646

Member Equity

Preferred Stock 1,067,537 964,161 963,074 1,077,358 959,613

Common Stock 14,515 14,804 14,807 14,524 13,253

Equity Certificates and Credits 309,105 266,199 261,364 260,167 359,248

Unallocated Capital 339,589 395,485 487,343 475,679 450,817

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 1,730,746 1,640,649 1,726,588 1,827,728 1,782,931

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 3,691,507 3,420,557 3,306,342 3,773,661 3,840,616
36

Table 15A—Consolidated balance sheet for grain cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $80,353 $101,816 $114,558 $96,931 $79,744

Accounts Receivable 369,612 330,418 345,883 373,915 377,297

Inventory 533,148 503,982 448,837 495,039 641,943

Other Current Assets 120,655 89,438 80,606 85,424 107,057

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 1,103,768 1,025,654 989,884 1,051,309 1,206,041

Investment

Cooperative Banks 45,116 44,229 44,774 37,167 32,176

Other Cooperatives 185,844 179,238 164,542 146,394 128,651

Other Investments 78,896 57,799 56,691 49,626 38,464

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 309,856 281,266 266,007 233,187 199,291

Net PP&E 827,123 805,967 738,643 633,813 578,342

Other Assets 105,078 103,484 102,869 112,354 80,387

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 2,345,825 2,216,371 2,097,403 2,030,663 2,064,061

Liabilities

Current Liabilities

Total Short-Term Debt 329,023 298,217 219,494 273,270 506,536

Accounts Payable 222,535 205,503 225,683 244,088 238,355

Member Liabilities 219,989 199,963 214,533 212,956 178,537

Other Current Liabilities 128,910 129,241 118,180 116,635 101,858

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 900,457 832,924 777,890 846,949 1,025,286

Long-Term Debt Less Current Portion 356,213 323,829 287,579 241,704 164,242

Other Liabilities and Deferred Credits 30,804 29,516 31,513 30,282 27,978

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 387,017 353,345 319,092 271,986 192,220

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 1,287,474 1,186,269 1,096,982 1,118,935 1,217,506

Minority Interest 73,604 70,297 75,744 86,550 85,443

Member Equity

Preferred Stock 72,523 71,287 84,385 57,004 55,842

Common Stock 28,890 29,324 30,707 20,234 20,304

Equity Certificates and Credits 650,981 642,626 589,955 552,038 503,995

Unallocated Capital 232,353 216,568 219,630 195,902 180,971

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 984,747 959,805 924,677 825,178 761,112

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 2,345,825 2,216,371 2,097,403 2,030,663 2,064,061
37

Table 16A—Consolidated balance sheet for poultry & livestock cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $35,238 $36,995 $21,878 $26,637 $27,525

Accounts Receivable 233,982 208,514 210,865 347,201 319,989

Inventory 193,979 201,841 187,483 298,979 272,764

Other Current Assets 67,325 78,879 351,988 108,816 62,903

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 530,524 526,229 772,214 781,633 683,181

Investment

Cooperative Banks 4,373 4,554 4,781 5,058 4,860

Other Cooperatives 1,270 1,279 969 30,854 976

Other Investments 167,988 106,199 125,623 103,851 106,013

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 173,631 112,032 131,373 139,763 111,849

Net PP&E 267,946 276,273 285,352 320,704 279,005

Other Assets 161,760 116,425 96,003 61,000 46,728

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 1,133,861 1,030,959 1,284,942 1,303,100 1,120,763

Liabilities

Current Liabilities

Total Short-Term Debt 298,634 193,604 436,020 324,321 241,613

Accounts Payable 95,421 100,680 97,914 158,761 135,420

Member Liabilities 12,952 12,060 8,864 9,106 32,701

Other Current Liabilities 75,041 93,741 58,245 59,431 70,928

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 482,048 400,085 601,043 551,619 480,662

Long-Term Debt Less Current Portion 269,332 201,424 335,467 268,512 191,324

Other Liabilities and Deferred Credits 80,365 88,701 55,953 54,056 44,384

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 349,697 290,125 391,420 322,568 235,708

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 831,745 690,210 992,463 874,187 716,370

Minority Interest 1,390 1,048 676 28,458 28,172

Member Equity

Preferred Stock 2,884 2,696 2,757 2,766 2,329

Common Stock 1,096 1,097 1,099 1,098 1,102

Equity Certificates and Credits 225,430 232,260 228,682 233,333 235,166

Unallocated Capital 71,316 103,648 59,265 163,258 137,624

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 300,726 339,701 291,803 400,455 376,221

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 1,133,861 1,030,959 1,284,942 1,303,100 1,120,763
38

Table 17A—Consolidated balance sheet for rice cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $26,607 $20,235 $3,836 $9,390 $4,111

Accounts Receivable 89,331 100,988 112,644 103,156 92,882

Inventory 142,699 137,556 183,732 210,716 206,603

Other Current Assets 3,205 6,889 396 1,279 5,370

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 261,842 265,668 300,608 324,541 308,966

Investment

Cooperative Banks 15,503 15,266 13,845 12,511 12,741

Other Cooperatives - - - - -

Other Investments 18,325 19,690 20,907 20,795 15,904

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 33,828 34,956 34,752 33,306 28,645

Net PP&E 189,674 182,009 181,622 183,821 177,650

Other Assets 2,613 3,101 4,244 2,654 3,215

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 487,957 485,734 521,226 544,322 518,476

Liabilities

Current Liabilities

Total Short-Term Debt 79,466 112,330 135,610 183,461 147,446

Accounts Payable 32,139 28,690 33,057 33,014 44,529

Member Liabilities 42,765 31,823 35,335 25,658 24,777

Other Current Liabilities 19,192 8,929 16,191 10,242 13,462

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 173,562 181,772 220,193 252,375 230,214

Long-Term Debt Less Current Portion 70,063 66,913 71,183 67,136 65,665

Other Liabilities and Deferred Credits - - - - -

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 70,063 66,913 71,183 67,136 65,665

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 243,625 248,685 291,376 319,511 295,879

Minority Interest - - - - -

Member Equity

Preferred Stock - - - - -

Common Stock 8 8 8 8 8

Equity Certificates and Credits 162,888 161,636 159,832 160,297 161,512

Unallocated Capital 81,436 75,405 70,010 64,506 61,077

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 244,332 237,049 229,850 224,811 222,597

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 487,957 485,734 521,226 544,322 518,476
39

Table 18A-Consolidated balance sheet for sugar cooperatives, 1996-2000

2000 1999 1998 1997 1996

$1,000

Assets

Current Assets

Cash $73,789 $10,249 $9,475 $16,141 $8,217

Accounts Receivable 142,690 176,426 145,490 153,192 93,015

Inventory 294,814 250,736 315,672 313,285 128,687

Other Current Assets 18,399 34,473 42,947 28,706 19,032

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Assets 529,692 471,884 513,584 511,324 248,951

Investment

Cooperative Banks 24,459 23,460 23,727 21,055 24,474

Other Cooperatives 10,776 11,683 10,272 10,328 29,433

Other Investments 52,540 49,299 40,465 43,007 53,242

------------------- ------------------- ------------------- ------------------- -------------------

Total Investments 87,775 84,442 74,464 74,390 107,149

Net PP&E 881,430 884,231 818,316 733,269 426,619

Other Assets 279,944 277,156 280,044 281,752 15,734

------------------- ------------------- ------------------- ------------------- -------------------

Total Assets 1,778,841 1,717,713 1,686,408 1,600,735 798,453

Liabilities

Current Liabilities

Total Short-Term Debt 266,896 226,848 304,054 231,612 52,305

Accounts Payable 104,887 117,243 119,006 115,883 44,736

Member Liabilities 70,593 48,859 22,786 84,200 75,546

Other Current Liabilities 35,134 25,090 23,275 20,283 20,268

------------------- ------------------- ------------------- ------------------- -------------------

Total Current Liabilities 477,510 418,040 469,121 451,978 192,855

Long-Term Debt Less Current Portion 512,384 531,136 468,578 472,652 280,376

Other Liabilities and Deferred Credits 50,257 53,270 48,648 45,713 22,366

------------------- ------------------- ------------------- ------------------- -------------------

Total Non-current Liabilities 562,641 584,406 517,226 518,365 302,742

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities 1,040,151 1,002,446 986,347 970,343 495,597

Minority Interest 227,305 226,215 244,482 240,539 338

Member Equity

Preferred Stock 149,777 150,230 147,117 139,748 46,861

Common Stock 152 160 160 157 4,154

Equity Certificates and Credits 428,784 393,883 341,016 271,036 238,726

Unallocated Capital (67,328) (55,221) (32,714) (21,088) 12,777

------------------- ------------------- ------------------- ------------------- -------------------

Total Equity 511,385 489,052 455,579 389,853 302,518

------------------- ------------------- ------------------- ------------------- -------------------

Total Liabilities and Equity 1,778,841 1,717,713 1,686,408 1,600,735 798,453
U.S. Department of Agriculture

Rural Business–Cooperative Service

Stop 3250

Washington, D.C. 20250-3250

Rural Business–Cooperative Service (RBS) provides research,

management, and educational assistance to cooperatives to

strengthen the economic position of farmers and other rural

residents. It works directly with cooperative leaders and

Federal and State agencies to improve organization,

leadership, and operation of cooperatives and to give guidance

to further development.

The cooperative segment of RBS (1) helps farmers and other

rural residents develop cooperatives to obtain supplies and

services at lower cost and to get better prices for products they

sell; (2) advises rural residents on developing existing

resources through cooperative action to enhance rural living;

(3) helps cooperatives improve services and operating

efficiency; (4) informs members, directors, employees, and the

public on how cooperatives work and benefit their members

and their communities; and (5) encourages international

cooperative programs. RBS also publishes research and

educational materials and issues Rural Cooperatives magazine.

The U.S. Department of Agriculture (USDA) prohibits

discrimination in all its programs and activities on the basis of

race, color, national origin, gender, religion, age, disability,

political beliefs, sexual orientation, and marital or family

status. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for

communication of program information (braille, large print,

audiotape, etc.) should contact USDA’s TARGET Center at

(202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director,

Office of Civil Rights, Room 326-W, Whitten Building, 14th and

Independence Avenue, SW, Washington, D.C. 20250-9410 or

call (202) 720-5964 (voice or TDD). USDA is an equal

opportunity provider and employer.