Abstract

Imports by Cooperatives, 1991

Karen J. Spatz

Agricultural Cooperative Service

U.S. Department of Agriculture

Thirty cooperatives reported imports valued at $463.64 million in 1991.

Farm inputs accounted for the largest share, 69.8 percent or $323.57 million.

Agricultural commodity imports accounted for $137.75 million. Canada is the

largest individual supplier of goods to cooperatives in the United States, providing more than 60 percent of imports.

Key Words: Cooperatives, cooperative imports, agricultural imports.

ACS Research Report 121

September 1993
Preface

This report describes the extent of U.S. farmer cooperative involvement in

importing by determining the number of cooperative importers, c.i.f. dollar values of cooperative imports by commodity and origin, and share of U.S. imports

for 1991.

The definitions in this report are consistent with those used by the U.S.

Department of Commerce. The c.i.f. value is the customs value of imports

(value of imports appraised by U.S. Customs Service) plus all freight, insurance, and other charges contracted in moving the merchandise from the origin

country to first port of entry in the United States. U.S. imports in this report are

reported as “general imports,” which includes entries for immediate consumption and entries into Customs bonded warehouses to be withdrawn for later

consumption or exportation. A country of origin is defined as the country where

merchandise is grown, manufactured, or mined.

Cooperative import data were last collected by Agricultural Cooperative

Service, USDA in 1986 and reported in imports by Cooperatives, 1986.

Data for this report were gathered from a 1 -page questionnaire. The initial

mailing was followed by a second mailing and telephone contact for each nonrespondent. Cooperatives were requested to provide calendar year 1991 c.i.f.

dollar value of imports by commodity and country of origin, and percent imported by each method of purchase. These methods include: a) purchased directly

from foreign buyer by own import staff; b) purchased through domestic-based

import commission agent; c) purchased through foreign-based import commission agent; d) purchased from domestic-based import management or trading

company; ore) purchased from other sources.

The questionnaire was mailed to 59 cooperatives, previously identified by

ACS as importers and/or exporters. Fifty-two cooperatives responded (88 percent). Of these, 30 or 50.8 percent reported imports in 1991. Of these, 14 ’

reported imports in 1986.
Contents

Cooperative Participation in Importing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Method of Import Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Import Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Cooperative Shares of U.S. Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Source of Imported Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Tables

1. Cooperative import concentration, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. Method of purchase, by commodity, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

3. Value of imports by cooperatives, by commodity group,

1986 and 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4. Value of U.S. and cooperative imports, and cooperative

share of U.S. imports, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

5. Value of U.S. cooperative imports, by region, 1986 and 1991 . . . . . . . 7

Figures

1 . Imports by Cooperatives by Commodity Group, 1991.. ................. .8

2. Imports by Commodity Group as Percent of Total

Cooperative Imports, 1986 and 1991 ............................................ .9

3. Cooperative Imports by Origin, 1991 ............................................lO

4. Percent of Cooperative Imports by Origin, 1986 and 1991.. ........ .ll

5. Origins by Commodity Group, 1991 ............................................ .12
Imports by Cooperatives, 1991

Karen J. Spatz

Agricultural Economist

International trade is an important aspect of

most agricultural businesses today, including cooperatives. Trade liberalization has created an atmosphere in which negotiations for NAFTA and GATT

recognize the importance of agricultural trade. In

1990, cooperatives reported exports totaling $4.1

billion, up 21 percent from 1985.

Imports are essential for some cooperatives to

remain competitive in today’s global economy.

Marketing cooperatives import to offer consumers

a differentiated product line, to offset seasonal

shortages in domestic supply, and to lower production costs. A cooperative could expand its product

line, for instance, by blending imported and member products to create a new product. Importing

also helps marketing cooperatives extend their

marketing season and compete with noncooperative suppliers. The lower-cost imported product

further enables cooperatives to remain competitive

in today’s global economy.

Supply cooperatives also import products to

offer their members a wider variety of low-cost

products. The imported product is either used as

an input in further processing, such as fertilizer

mixtures, or sold to members as is, such as milking

equipment.

COOPERATIVE PARTICIPATION

IN IMPORTING

The number of cooperatives participating in

importing has increased slightly, from 28 to 30,

since 1986. Fourteen of the cooperatives that

reported imports in 1986 did not import in 1991 or

did not respond to the survey. Some may have

gone out of business, changed to a noncooperative

business, merged, or did not import in 1991. There

were 16 new cooperative importers in 1991.

Dollar value of imports by cooperatives

ranged from less than $20,000 to more than $100

million. Import purchases by most cooperatives

were less than $1 million each (table 1). But purchases from these 12 cooperatives accounted for

less than 1 percent of total cooperative imports.

More than 60 percent of cooperative imports were

concentrated in five cooperatives. Imports for each

exceeded $25 million.

Method of Import Purchase

Cooperatives use different methods to import

such as, purchases direct from seller by the cooperative staff, through domestic-based import agents

(brokers), through foreign-based import agents ’

(brokers), from domestic-based import trading

companies, and by other unspecified methods.

Depending upon the country and/or product,

a cooperative might use one or more of these methods to import. A cooperative might import direct

from a supplier to obtain a steady supply of a specific product. For example, cooperative fertilizer

manufacturers require reliable sources of fertilizer

components. A cooperative importing only when

the member products are in short supply may find

purchasing from a domestic or foreign broker less

costly than using a long-term supplier of the commodity.

Sixty-four percent of products imported by

cooperatives are purchased directly from foreign

sellers by the cooperative staff (table 2). Fertilizer

and materials; twine, baler, and cordage; and fuels

purchased direct by the cooperative staff accounted

for 71.7,80.5, and 95.6 percent, respectively, of each
group’s total imports. In contrast, only 10.5 percent

of fruits and products were imported directly from

suppliers with the majority purchased from domestic import trading companies (68.6 percent). This

type and domestic transactions are essentially the

same.

Import Values

Import purchases by 30 cooperatives totaled

$463.6 million in 1991. Thirty percent was food.

Farm inputs totaled $323.6 million or 70 percent of

imports by cooperatives. The largest share, 34.1

percent or $158.3 million, was by seven cooperatives in the form of fertilizer and materials.

Another four cooperatives had fuel import purchases of $141.7 million representing 30.6 percent.

Six cooperatives imported twine, binder and baler,

and cordage totaling $20.7 million or 4.5 percen;.

Fruits and products valued at $95 million

accounted for 20.5 percent of total imports by cooperatives (table 3, fig. 1) and 69 percent of all cooperative food imports. Ten cooperatives imported

processed fruit with a value of $87.9 million. Three

cooperatives imported fresh fruit valued at $7.1

million. To preserve confidentiality, commodities

reviews will not be discussed because too few

cooperatives reported imports.

The value of cooperative imports decreased 39

percent, from $761.9 million in 1986 to $463.6 million in 1991 (table 3). This was due in part to a larger decrease in fuel imports. This decrease is not

fully reflected in the data because fuels were part

of the “other” imports category in 1986 (fig. 2).

Fertilizer and materials declined in value almost 32

percent, from $231 million in 1986 to $158 million

in 1991, but the share of imports increased from 30

percent to 34 percent. The value of “other farm

inputs” decreased 58 percent, but the effect was

minimal because the share of imports remained

less than 1 percent. Fruit and products declined

almost 18 percent, from $115 million in 1986 to $95

million in 1991, but the proportion of total cooperative imports increased from 15 percent in 1986 to

20.5 percent in 1991. Imports in the “other foods”

category increased from 1 percent in 1986 to 9 percent in 1991, and the value nearly quadrupled. The

number of products included in this category also

increased from 1986.

Imports are reported for only two distinct

time periods, 1986 and 1991. Therefore, these

changes do not accurately indicate trends. A onetime large import purchase reflected in any category in one of the chosen years could misrepresent

import activity as a trend over the 5-year interval.

Furthermore, the cooperatives that responded to

the survey were different in 1986 than 1991. This

also precludes an accurate analysis of trends.

Cooperative Shares of U.S. Imports

Cooperative share of all U.S. imports is

insignificant. However, cooperative shares of specific commodities are relevant for farm inputs categories. Farm inputs shares amounted to 13 percent

of U.S. twine, binder and baler, and cordage

imports, 4 percent of fertilizer and materials U.S.

imports, and less than 1 percent of U.S. fuel

imports (table 4). Cooperatives shares of fruits and

products and other foods are 0.8 and 0.3 percent,

respectively. Shares do not include imports purchased by cooperatives from domestic-based

import management companies.

Cooperative shares of U.S. imports for 1991

were calculated by a different methodology than

for 1986. So comparing 1986 and 1991 import

shares is not valid.

Source of Imported Products

U.S. cooperatives imported from 33 countries

in 1991. The primary source was Canada, exporting

products valued at $290.4 million to U.S. cooperatives (table 5, figs. 3 and 4). Canada supplied 27

percent of other foods imports, 89 percent of fertilizer imports, and 96 percent of fuels imports

(fig. 5). The share of imports from Canada

increased from 27.7 percent in 1986 to 62.6 percent

in 1991, while the total value of imports increased

by 37.6 percent.

In 1991, the second largest origin of cooperative imports (20 percent) was Central and South

America. However, cooperative imports from this

region fell from $151.1 million in 1986 to $88 mil2
lion in 1991, down almost 42 percent. The share of

total cooperative imports from this region was stable at 19 percent in both years (fig.4). These countries accounted for almost 60 percent of cooperative

fruit imports and all twine imports (fig. 5).

All other regions each accounted for five percent or less of cooperative imports. Western Europe

accounted for $21.9 million or 4.7 percent of cooperative imports in 1991. Thirty-seven percent of

other inputs came from Western Europe. Imports

from Western Europe declined 58 percent, from

$52.6 million in 1986 to $21.9 million in 1991, while

share of imports fell from 6.9 percent to 4.7 percent.

Simultaneously, imports from East Asia declined

from $92.6 million to $1.2 million. Share dropped

from 12 percent to less than 1 percent. East Asia

was the origin for 63 percent of other imports.

References

Spatz, Karen J. Agricultural Exports by CooperatizJes,

1990. Agricultural Cooperative Service,

USDA. ACS Research Report 107.1992.

Spatz, Karen J. Imports by Cooperatives, 1986.

Agricultural Cooperative Service, USDA.

ACS Research Report 74.1988

United States Department of Commerce, Bureau of

Census. Report FT925/91-A. U.S.

Merchandise Trade: Exports, General Imports,

and imports for Consumption. U.S.

Government Printing Office, Washington,

DC, 1992.

Table l-Cooperative import concentration, 1991-

Range No. of Dollar

co-ops value

Percent

of value

Less than $1 million 12 2,774,688 0.6

$1 million - $9.9 million 5 19,628,756 4.2

$10 million - $24.9 million 8 153,008,026 33.0

$25 million or more 5 288,225,562 62.2

Totals 30 463.637.032 loon
Table 2-Method of purchase, by commodity, 1991

Commodity group

Bought directly Bought through Bought through Bought from

from foreign seller domestic-based foreign-based domestic import

by co-op staff import agent import agent trading company

Other

Percent

Food

Fruits and products 1

Other food 2

Farm inputs

Fertilizer and materials 3 71.69 2.81 1.05 11.90 12.56

Twine, binder and baler,

and cordage

Fuels 4

Other farm inputs 5

Other 6

Totals

10.48

44.99

80.51 14.26 0.00

95.64 0.57 0.00

33.82 1.73 0.00

37.69 9.71 24.53

64.00 4.49 0.60

12.98

0.00

0.44

0.30

68.60

51.67

5.24

3.78

64.44

28.08

24.81

7.51

3.04

0.00

0.00

0.00

0.00

6.11

1 Includes fresh citrus and noncitrus fruit, and citrus and noncitrus fruit processed products.

2 Includes meat and meat preparations, cereals including wheat, rice, flours, starch, etc.,

sugar, animal materials such as offal, and animal feeding stuff including fodder.

3 Includes manufactured fertilizer and materials; crude potassium nitrate; inorganic chemical

elements; liquid anhydrous ammonia: and ammonium, calcium, and potassium compounds.

4 Includes crude petroleum; gas, motor fuel, kerosene and fuel oils; and natural and

manufactured gas.

5 Includes wood, lumber and cork, unmanufactured; organic chemicals and related materials;

dye, tan, and color material; medicinal and pharmaceutical products including vitamins,

antibiotics and hormones; tires and tubes for trucks, tractors, and implements; other wood

and cork manufactures, except furniture; manufactures of metal, including wire, nails, hand

tools, etc.; agricultural and dairy machinery and parts; and footwear,

B Includes food processing machinery, specialized industrial machinery, and other unspecified

imports.

4
Table 3-Value of imports by cooperatives, by commodity group, 1986 and 1991

co-ops Value Percent of total

1986 1991 1986 1991 1986 1991

________N~mber_ _________ __________________Dollars___ ___________ ___ ________ Percent ____ _ ____

Food

Fruits & products l

Other food 2

Farm inputs

Fertilizer and materials 3

Twine, binder and baler,

and cordage

Fuels 4

Other farm inputs 5

Other 6

Totals

11 12

6 7

8 7

6 6

na 4

4 6

4 7

‘28 730

115177,016

9,022,963

231,023,561

15,553,ooo

na

6,727,OOO

384,420,OOO

761,923,771

95,056,087 15.1 20.5

42,697,642 1.2 9.2

158,320,086 30.3 34.1

20,719,800 2.0 4.5

141,711,742

2.823,937

2,307,738

4639637,032

na 30.6

0.9 0.9

50.5 0.5

1 Includes fresh citrus and noncitrus fruit, and citrus and noncitrus fruit processed products.

2 In 1966, includes vegetables including legumes, nuts, animal feeding stuff and honey. In

1991, includes meat and meat preparations, cereals including wheat, rice, flours, starch,

etc., sugar, animal materials such as offal, and animal feeding stuff including fodder.

3 Includes manufactured fertilizer and materials; crude potassium nitrate; inorganic chemical

elements(l991 only); liquid anhydrous ammonia (1991 only); and ammonium, calcium, and

potassium compounds.

4 In 1966, crude petroleum was included in Other. In 1991, includes crude petroleum; gas,

motor fuel, kerosene and fuel oils; and natural and manufactured gas.

5 In 1966, includes vegetable materials, crude (seeds and bulbs), manufactures of metal, and

farm machinery. In 1991, includes wood, lumber and cork, unmanufactured; organic

chemicals and related materials; dye, tan, and color material; medicinal and pharmaceutical

products including vitamins, antibiotics and homlones; tires and tubes for trucks, tractors,

and implements; other wood and cork manufactures, except furniture; manufactures of

metal, including wire, nails, hand tools, etc.; agricultural and dairy machinery and parts; and

footwear.

6 In 1986, includes crude petroleum and imports not specified. In 1991, includes food

processing machinery, specialized industrial machinery, and other unspecified imports.

7 Does not add because some cooperatives imported more than one commodity group,

5
Table AValue of U.S. and cooperative imports, and cooperative share of U.S. imports, 1991

Commodity group U.S. co-op ’ Co-op share *

Food

_____________________ __________Dollars_______________________________ Percent

Fruits & products 3

Other food 4

Farm inputs

Fertilizer and materials 5

Twine, binder and baler,

and cordage

Fuels 6

Other farm inputs 7

Other B

- = not able to calculate.

3,753,105,000 29,851,315 0.80

6,007,830,000 20,633,830 0.34

3,211,200,000 139,481,391 4.34

149,979,ooo 19,634,800 13.09

57,112,208,000 136,353,742 0.24

31,061,518,000 1,004,140 0.00

- 1,659,738 -

Cooperative imports do not include purchases from domestic-based import management

companies,

Cooperative imports purchased direct or through agent divided by U.S. imports.

Includes fresh citrus and noncitrus fruit, and citrus and noncitrus fruit processed products.

Includes meat and meat preparations, cereals including wheat, rice, flours, starch, etc.,

sugar, animal materials such as offal, and animal feeding stuff including fodder.

Includes manufactured fertilizer and materials; crude potassium nitrate; inorganic chemical

elements; liquid anhydrous ammonia; and ammonium, calcium, and potassium compounds.

Includes crude petroleum; gas, motor fuel, kerosene and fuel oils; and natural and

manufactured gas.

7 Includes wood, lumber and cork, unmanufactured; organic chemicals and related materials;

dye, tan, and color material; medicinal and phanaceutical products including vitamins,

antibiotics and hormones; tires and tubes for trucks, tractors, and implements; other wood

and cork manufactures, except furniture; manufactures of metal, including wire, nails, hand

tools, etc.; agricultural and dairy machinery and parts; and footwear.

B Includes food processing machinery, specialized industrial machinery, and other unspecified

imports.

6
Table EValue of U.S. cooperative imports, by region, 1986 and 1991

Region 1986

Dollars Percent

Canada 211,065,451 27.70

Latin America

Mexico 11,455,930 1.50

Central and South America ’ 151 ,142,555 19.84

Europe

Western Europe 2 52,603,598 6.90

Eastern Europe 3 9,915,5og 1.30

Asia

Southeast Asia 4 12,286,078 1.61

East Asia 5 92,552,217 12.15

West and South Asia 6 6,124,790 0.80

Africa 7 204,182,OOO 26.80

Oceania B 10,595,918 1.39

Other g na na

Total 761,924,046 100.00

-na = not applicable

1991

Dollars Percent

290,434,263 62.64

12,419,593 2.68

87,987,489 18.98

21,927,918 4.73

1,957,820 0.42

6,350,054 1.37

1,214,ooo 0.26

13,546,336 2.92

na na

17,578,232 3.79

10,221,327 2.20

463,637,032 100.00

,

In 1986, includes Dominican Republic, Haiti, Jamaica, Trinidad and Tobago, Argentina, Brazil,

Chile, Colombia, Peru, Uruguay, and Venezuela. In 1991, includes Belize, Jamaica, Argentina,

Brazil, Chile, French W. Indies, Ecuador, and Venezuela.

In 1986, includes Belgium, Denmark, W. Germany, Greece, Italy, Netherfands, U.K., Austria,

Switzerland. In 1991, includes Belgium, Denmark, Germany, Greece, Italy, Netherfands,

U.K., Spain, Austria, and Switzerland.

In 1986, includes E. Genany, Hungary, Yugoslavia, and USSR. In 1991, includes Hungary,

Poland, and Yugoslavia.

In 1986, includes Indonesia, Malaysia, Philippines, and Thailand. In 1991, includes Hong

Kong and Thailand.

In 1986, includes Japan, PRC, and Taiwan. In 1991, includes Japan and Korea.

In 1986, includes India, Israel, and Turkey. In 1991, includes India, Israel, Saudi Arabia, and

Turkey.

In 1986, Africa not specified by country. In 1991, Africa not reported separately due to

confidentiality.

In 1986 and 1991, incudes Australia and New Zealand.

In 1991 includes Africa and unreported/unknown countries.

7
Figure l-Imports by Cooperatives by Commodity Group, 1991

Other food (9.2%)

Other (0.5%) -

Fertilizer (34.1%)

Fruits (20.5%)

Other Inputs (0.9%)

Fuels (30.6%)

Twine (4.5%)
Figure 2- Imports by Commodity Group as Percent of Total Cooperative Imports, 1986 and 1991

Percent

60

Fruits Other food Fertilizer Twine Fuels Other Inputs Other

9
Figure 3- Cooperative Imports by Origin, 1991

Canada (63 %) ___

.................................................

...................

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Other (2%)

Oceania (4%)

Asia (5%)

Europe (5%)

Central & South

America (19%)

Mexico (3%)
Figure d- Percent of Cooperative Imports by Origin, 1986 and 1991

Percent

70

Canada Latin Western

America Europe

Eastern

Europe

Southeast

Asia

East

Asia

West & Rest

South Asia of World

11
Figure &Origins by Commodity Group 1991

Other Food -

Other Inputs -

0% 25% 50% 75% 100%

.~:::::

E l :i$ljlj:j;;;i; Canada Mexico @@j Central & South America *

lI?l :~~~~;:: Western Europe lIzI liiiiii~iiiiiii East Asia Rest of World
U.S. Department of Agriculture

Agricultural Cooperative Service

P.O. Box 96576

Washington, D.C. 20090-6576

Agricultural Cooperative Service (ACS) 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 agency (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.

ACS publishes research and educational materials and issues Farmer

Cooperatives magazine. All programs and activities are conducted on a

nondiscriminatory basis, without regard to race, creed, color, sex, age, marital

status, handicap, or national origin.

*U.S. G.P.0.:1993-'341-334:80196/ACS