Unlted States

Department of

Agriculture

Agricultur$

(2.2wp;zdwe

ACS

Research

Report 133

Marketing Operations

of Dairy Cooperatives
Marketing Operation of Dairy Cooperatives

K. Charles Ling and Carolyn Betts Liebrand

Agricultural Cooperative Service

The Nation’s 265 dairy cooperatives marketed 122.6 billion pounds of milk,

or 82 percent of all milk sold to plants and dealers in 1992. These cooperatives

were owned by 110,440 member-producers. Eighty-six cooperatives operated

299 dairy processing and manufacturing plants, 44 cooperatives had milkreceiving stations only, and 135 had no milk-handling facilities. Cooperatives

sold 16 percent of the Nation’s packaged fluid products, 10 percent of the ice

cream and ice milk, 65 percent of the butter, 81 percent of the dry milk products,

43 percent of the natural cheese, 48 percent of the dry whey products, and 13

percent of the cottage cheese made in the United States. The prevailing

method of paying for member milk by the reporting cooperatives was to adjust

the milk price for both butterfat and other component(s). Milk quality was the primary driving factor in the overwhelming majority of price incentive programs

offered by cooperatives.

Key Words: Cooperatives, dairy, marketing, pricing, structure.

ACS Research Report 133

April 1994
Preface

Information for this report came primarily from a survey of all U.S. dairy

cooperatives. In some cases, data were estimated for nonrespondents based

on their financial statements or other sources.

Data for this report came from cooperatives’ fiscal year ending in calendar

1992. Fiscal years of cooperatives vary within the calendar year, so their data

reflect some differences in time periods. However, the effects of time differences are reduced by using annual data. Previous surveys covered the fiscal

years ended April 1, 1981 and 1988. Data prior to 1981 is covered in ACS

Research Report 88.

In this report, a number of comparisons are made of regional cooperative

operations based on where cooperatives are headquartered. Because many of

the larger cooperatives may have significant operations in regions other than

where headquartered, there are a few cases where data may not accurately

reflect the level of cooperative activity in a particular region. Also, care should

be taken when making regional comparisons because different regional alignments were used for the various analyses presented in the report.

The authors acknowledge assistance from other agencies and individuals

for this study, most particularly the Estimates Division of USDA’s National

Agricultural Statistics Service and the Statistics and Technical Services staff of

ACS.

i
Contents

Highlights

*..

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III

Cooperative Industry Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Milk Receipts and Utilization .............................................................................. 2

Supply, Location, and Grade .................................................................... .4

Supply by Source ....................................................................................... 4

Utilization of Milk Supply ............................................................................ 6

Plant Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Dairy Products Marketed ................................................................................... 6

Raw Whole Milk ......................................................................................... 6

Butter.......................................................................................................... 6

Dry Milk Products ....................................................................................... 8

Cheese ....................................................................................................... 8

Packaged Fluid Milk Products ................................................................... 9

Cottage Cheese ......................................................................................... 9

Ice Cream and Ice Milk .............................................................................. 9

Ice Cream Mix and ice Milk Mix ................................................................. 9

Bulk Condensed Milk Products.. ............................................................... .9

Dry Whey Products .................................................................................... 9

Cooperative Concentration Ratios ............................................................. 9

Methods of Pricing Milk to Pay Member-Producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Pricing Incentive Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ii
Highlights

Dairy products accounted for 35 percent of the value of all agricultural

cooperative marketings during 1992. Dairy cooperatives received or bargained

for 82 percent of all milk sold by farmers to the Nation’s plants and dealers.

The number of dairy cooperatives decreased 10 percent, from 296 to 265,

between 1987 and 1992. In 1992,86 cooperatives processed and manufactured dairy products, down from 121 in 1987. Also, the number of cooperatives

selling raw whole milk fell from 251 in 1987 to 230 in 1992.

Cooperatives’ share of total volume sold by farmers to plants and dealers

increased from 76 percent to 82 percent. The volume of milk marketed by coop

eratives increased in all regions. Members’ grade A milk marketings in 1992

accounted for 81 percent of the Nation’s grade A milk, up 5 points from 1987.

While marketing of manufacturing grade milk decreased, the share increased to

62 percent of the national manufacturing grade milk production. About 62 percent of total cooperative volume, including inter-cooperative sales, was sold as

raw whole milk, up from 55 percent in 1987.

There were 110,440 member-producers delivering milk to 256 dairy cooperatives with direct members. Three regions-East North Central, West North

Central, and Middle Atlantic-together accounted for 82 percent of all memberproducers and 56 percent of cooperative milk volume.

Dairy cooperatives owned 381 plants in 1992,81 of them for receiving and

shipping milk only. They operated 80 American cheese plants and 46 Italian

cheese plants; 75 fluid product packaging plants; 52 for manufacturing dry products; and 48 plants churning butter.

While net sales of butter and cheese increased from 1987 to 1992, those

of dry milk products decreased. However, cooperatives’ share of national butter

production decreased from 71 to 65 percent during this period.

Cooperatives’ share of dry milk products (nonfat dry milk, dry buttermilk,

and dry whole milk) also decreased to 81 percent of the Nation’s output from 91

percent reported in 1987.

Cooperatives’ sales of cheese surged 16 percent from 2.4 billion pounds to

2.8 billion pounds. At the same time, however, national cheese production

increased 21 percent. As a result, cooperatives’ share of the natural cheese

market declined from 45 percent to 43 percent by 1992.

Sales of packaged fluid milk products increased both in volume and in

share of market. The 8.9 billion pounds marketed was 16 percent of the

Nation’s production, up from 14 percent in 1987. Cooperatives’ sales of cottage

cheese as a percentage of national production remained constant at 13 percent, while share of ice cream (including ice milk) increased from 8 percent to

10 percent. In 1992, cooperatives marketed 13 percent of the Nation’s ice

cream mix and ice milk mix, 3 percent of the yogurt, 27 percent of the bulk condensed milk, and 48 percent of the dry whey products.

Most dairy cooperatives continue to be relatively small business organizations. However, through consolidation and growth, an increasing amount of

dairy products was sold by larger cooperatives. The 20 largest dairy cooperatives received 72 percent of all grade A milk marketed through cooperatives.

. . . 111
Highlights

About 84 percent of cooperative milk processing and manufacturing was carried

out by the 20 largest cooperatives with plant operations.

Findings based on responses by 153 cooperatives indicate that the traditional method of paying for milk adjusted for butterfat, with or without adjusting

for other components, was the most prevalent way cooperatives paid for member milk. Out of the 153 cooperatives, 122 offered incentive programs to induce

members to produce high-quality milk and at the time and volume desirable to

cooperatives, Quality incentives-the backbone of all other incentive programs-were offered by 116 of the 122 cooperatives.

iv
Marketing Operations of Dairy Cooperatives

K. Charles Ling

Carolyn Betts Liebrand

Farmer owned and operated dairy cooperatives continue to provide the most significant channel for marketing milk from the Nation’s dairy

farms.

In line with industry and dairy farm trends,

these cooperatives are becoming fewer but are handling larger volumes. In addition, cooperatives

process, manufacture, and market a large or dominant proportion of some of the Nation’s dairy

products.

This report, sixth in a series of periodic

appraisals of the scope and performance of dairy

cooperatives, describes their continuing adaptation

to an ever-changing marketing environment.

COOPERATIVE INDUSTRY PROFILE

Between 1987 and 1992, the number of dairy

cooperatives decreased 10 percent, from 296 to 265.

This was a slower decline than the 32-percent drop

recorded from 1980 to 1987. In 1992,81 percent of

all dairy cooperatives were in the Middle Atlantic,

East North Central, and West North Central

regions (table 1 and fig. 1). The greatest reduction

by 1992 was in the East North Central region,

where the number dropped 29 percent, from 75 to

53. In the West North Central region, the reduction

was from 77 to 72. The Middle Atlantic region by

1992 had the most dairy cooperatives (90).

In 1992,86 cooperatives processed and manufactured dairy products that amounted to 32 percent of all dairy cooperatives. This was less than

the 41 percent recorded in 1987 when 121 cooperatives were processing and manufacturing. Seventyone percent of the decline in the number of cooperatives that processed and manufactured dairy

products occurred in the East North Central and

West North Central regions.

The number of cooperatives operating only

milk-receiving stations was unchanged at 44. They

represented 17 percent of all dairy cooperatives.

Thirty-six of these cooperatives, or 82 percent, were

in the West North Central region.

Cooperatives that did not physically handle

milk and other dairy products increased from 44

percent to 51 percent of all U.S. dairy cooperatives.

More than half were in the Middle Atlantic region.

Nationally, the number of cooperatives marketing selected major dairy products continued to

decline (table 2). More cooperatives continued to

sell raw whole milk in bulk than any other product.

While the number declined from 251 to 230, the

proportion of dairy cooperatives performing this

activity increased from 85 percent to 87 percent.

Based on the percentage decrease in the number of cooperatives marketing various dairy products included in the survey, the numbers distributing bulk cream, cheese, butter and nonfat dry milk

declined the most between 1987 and 1992. The

number of cooperatives distributing bulk cream

decreased by 43 percent, while those distributing

cheese decreased by 20 percent to 75 cooperatives

in 1992.

Butter was distributed by 68 cooperatives,

down 17 percent from 1987. Similarly, cooperatives

selling nonfat dry milk dropped 16 percent, to 26

cooperatives.

The smallest decline in the number of cooperatives occurred in those distributing cottage cheese

and ice cream. In 1992,22 cooperatives distributed

cottage cheese, while 20 distributed ice cream.

The percent of dairy cooperatives distributing

packaged fluid milk products remained unchanged

1
FIIJWB I- Number of Dairy Cooperatives by Headquarters Region, 1992

In

81

West North Central

- -

New England

5

South Atlantic

12

from 1987 at 11 percent, although actual cooperative numbers declined 15 percent, from 34 to 29

cooperatives.

The number of dairy cooperatives marketing

various types of cheese was counted for the first

time in the 1992 survey: 59 distributing Cheddar

cheese; 38, other American cheese; 27, Mozzarella

cheese; 12, other Italian cheese; and 23, other

cheese. Most of these cooperatives were in the East

and West North Central regions. Seventeen cooperatives sold dry whey products while 19 had yogurt

sales.

MILK RECEIPTS AND UTILIZATION

In 1992, cooperatives received or bargained

for 122.6 billion pounds of milk (net of inter-coop2

erative transfers), or 82 percent of total volume

sold by farmers to the Nation’s plants and dealers

(table 3). Cooperatives’ share of this volume was

up from 76 percent in 1987. The volume marketed

by cooperatives increased 16 percent in the period,

while the Nation’s milk sold to plants and dealers

rose 7 percent.

Cooperatives’ share of the market varied considerably by region, based on their headquarter

locations (fig. 2). The Central region, with the

largest number of dairy cooperatives, had 58 percent of total U.S. cooperative milk volume in 1992,

down from 63 percent. The volume of milk marketed by cooperatives headquartered in the region

increased from 66.5 billion pounds to 71.6 billion

pounds. Cooperatives’ share of all milk sold to
F@re ~-Milk Sold to Plants and Dealers Reported by NASS, and Cooperative Share of Total by

Geographic Region, 1992

P&ii Mountain Cbntml Northeast South Atlantic United St&r

Region total 28.2 10.3 74.3 26.1 9.8 148.8

Cooperative volume 23.2 5.3 71.6 15.6 6.9 122.6

Pwwnt

Cooperative share 82 51 96 60 70 82

3
plants and dealers in this region continued to

increase, from 90 percent to 96 percent.

In the Pacific region, the Nation’s fastest

growing milk production region, milk sold to

plants and dealers increased 24 percent.

Simultaneously, cooperative volume rose 61 percent. As a result, cooperatives’ share of milk in the

region increased from 63 to 82 percent.

Cooperatives’ share of all milk marketed also

increased in the Northeast and the South Atlantic

regions, but significantly declined from 64 to 51

percent in the Mountain region. However, milk volume marketed by cooperatives increased in all

regions.

Supply, Location, and Grade

There were 110,440 member-producers deli vering milk to 256 dairy cooperatives with direct

members (table 4). Most (49,015) were found in the

East North Central region, followed by the West

North Central region (27,376) and the Middle

Atlantic region (14,577). Together the three regions

had 82 percent of total member-producers, but only

56 percent of milk delivered to dairy cooperatives.

Milk delivery per member-producer in the Pacific

region was 6.7 million pounds, the highest among

all regions. It was 10 times the milk delivery per

member-producer in the West North Central region

and 9 times the delivery in the East North Central

region.

Twenty-nine percent of the total milk received

directly from member-producers and marketed by

cooperatives came from farms in the East North

Central region (table 4 and fig. 31, down from 30

percent in 1987. Farms in the West North Central

and Middle Atlantic regions supplied 16 and 11

percent, respectively, of the total U.S. cooperative

member volume, each a decline from the previous

survey. Milk from cooperative members in the

Pacific region increased from 14 percent to 19 percent of total U.S. cooperative member milk.

Ninety-one percent of the supply of cooperatives’ manufacturing grade milk came from farms

in the two North Central regions47 percent from

the West North Central region and 43 percent from

the East North Central region. Marketings of manufacturing grade milk declined 42 percent or 1.9

billion pounds in the West North Central region.

Reflecting the continuing conversion from

manufacturing grade milk to grade A and the generally increased production of grade A milk, cooperatives marketed 20 percent more grade A milk

for their member-producers and 38 percent less

manufacturing grade milk.

Two hundred thirty four cooperatives marketed grade A milk for farmer-members and 135 marketed manufacturing grade. In 1992, cooperative

marketings of grade A milk for member-producers

totaled 113.3 billion pounds or a market share of 81

percent of all grade A milk, up from 76 percent in

1987. In the current survey year, cooperatives marketed 5.6 billion pounds of manufacturing grade

milk that represented a 62 percent market share, up

from 57 percent.

The proportion of grade A milk marketed by

cooperatives varied from 47 percent in the East

South Central region to 92 percent in the East

North Central and South Atlantic regions. A significant increase in quantities marketed and in cooperatives’ share of grade A marketings was found in

the Pacific region, showing 61 percent more grade

A milk and an increase of market share from 63 to

81 percent. The other increase in market share was

in the South Atlantic region, expanding from 82 to

92 percent. The East South Central region lost 20

market share points, from 67 percent to 47 percent.

All other regions either held their own or declined

in grade A milk market shares.

Supply by Source

In 1992,92 percent of the 131.9 billion pounds

of milk received by dairy cooperatives came directly from farmers, up from 91 percent in 1987 (table

5). Most of the remainder came from other cooperatives. Western region cooperatives received 98 percent of their milk directly from producers. By contrast, Eastern region cooperatives received only 84

percent of their milk directly from producers. In

1992,235 cooperatives received 125.6 billion

pounds of grade A milk from all sources, up 21.2

billion pounds (20 percent) from 1987. Receipts of

manufacturing grade milk by 123 cooperatives

4
~n3-Milk Sold to Plants and Dealers and Share of Cooperative Members, by Grade and

Production Region, 1992

_- New England

Inch

and

r South Atlantic

West South

Central

South Central

west west East East

Pecifii Mountaii North South North South New Mii South United

Central Central Central Central Engfand Atfantic Atfantic States

Billion pounds

Grade A Milk (region total) 27.7 9.5 17.8 0.4

Cooperative volume 22.5 7.9 15.8 6.8

35.2 5.2

32.4 2.5

Perwnt

4.4 21.6 9.7 139.8

3.1 13.3 9.0 113.3

Cooperative Share 81 83 89 80 92 47

Billion pounds

71 61 92 81

Manufacturing Grade Milk

(region total)

Cooperative Volume

.5 .8 4.0 .04 3.4 .2 - .l .06 9.0

.2 .l 2.7 l 2.4 l - .l .Ol 5.6

Cooperative Share 43 15 67 + 71 l - 91 16 62

l Not shown to avoid disdodng pmprietory information

- Nopmduction

Alf numbon an rounded.

5
were 6.3 billion pounds of manufacturing grade

milk, down 3.9 billion pounds (38 percent).

Utilization of Milk Supply

In 1992,128 billion pounds of raw milk was

received from all sources by the 256 cooperatives

reporting milk receipts (table 6). Sixty-two percent

of the total cooperative volume, including that

received from other cooperatives, was sold as raw

whole milk, up from 55 percent.

Across all regions, cooperatives sold proportionately more milk raw than they processed or

manufactured in their own plants. In the Western

region, the proportion of cooperative milk sold raw

jumped from 39 percent to 53 percent.

Cooperatives in the Western region processed or

manufactured 47 percent of their milk in 1992,

down from 61 percent in 1987. The ratio of milk

sold raw to milk processed or manufactured was

about 60 to 40 in the Central region in 1992, but 50

to 50 in 1987. The Eastern region followed the same

trend-73 percent sold raw in 1992 versus 68 percent in 1987.

PLANT OPERATIONS

Cooperatives owned 381 plants that performed a variety of marketing functions in 1992

(table 7). Seventy-one percent of these plants were

in the East and West North Central regions. The

Middle Atlantic region had 25 plants.

Twenty-one percent (81 plants) served only as

milk receiving stations. Most manufacturing operations were devoted to cheesemaking- making

American, 46 Italian, and 10 process cheese. Most

cooperative cheese plants were in the two North

Central regions.

Butter manufacturing, another important milk

manufacturing function, was carried out by 48

plants, down from 69 in 1987. Fifty-two plants

manufactured dry milk products. Cooperative butter plants were concentrated in the East and West

North Central and Pacific regions. Drying operations showed the same regional concentration. Dry

whey products were made in 40 cooperative plants,

mostly in the two North Central regions.

Seventy-five cooperative plants packaged

fluid milk products. Unlike the milk manufacturing

plants, fluid plants were scattered more uniformly

throughout all regions. West North Central region

had the most with 18, followed by 13 each in the

South Atlantic and East North Central regions.

Thirty-seven cooperatives plants made ice

cream and 25 made cottage cheese throughout the

Nation in a pattern similar to the fluid milk packaging plants.

DAIRY PRODUCTS MARKETED

This section and the tables that follow

describe the net volumes of major dairy products

marketed by cooperatives by region after subtracting transactions among cooperatives. The regions

are based on the locations of cooperatives’ headquarters. Also, comparisons are made between the

net volumes marketed by cooperatives and total

U.S. production. Other tables show the number of

cooperatives marketing dairy products and the volume marketed by selected size groupings. The

tables by size groupings show both the pounds

marketed and the percentage of total cooperative

sales without adjustments for inter-cooperative

transactions.

Raw Whole Milk

Raw whole milk is the commodity most often

sold by dairy cooperatives. In 1992, net raw milk

sales by 230 cooperatives amounted to 70 billion

pounds or 57 percent of net total volume received

(table 8). This represented an increase in volume

marketed over 1987, and also an increase in the raw

milk sales as a percentage of total receipts. During

the past 5 years, the volume of raw milk sold

increased substantially in all regions.

Butter

Excluding inter-cooperative transfers, cooperatives distributed a net volume of 885 million

pounds of butter in 1992, up 13 percent (table 9).

This represents 65 percent of total U.S. production,

down from 71 percent.

6
FI@IR c Utilization of Cooperatively Marketed Milk, by Region, 1992

Includes Alaska

and Hawaii

Billion pounds

60

50

40

30

20

10

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Western Central Eastern

7
Pacific region dairy cooperatives accounted

for 43 percent of cooperative butter sales and surpassed the volume handled by cooperatives in the

Central region. Eastern region cooperatives

increased butter sales in 5 years by 78 percent,

while the Pacific region was up 32 percent.

Elsewhere, butter sales declined.

While the volume of butter distributed

increased, the number of cooperatives distributing

it continued to decline-82 in 1987 to 68 in 1992

(table 10). Fifteen cooperatives, each handled more

than 20 million pounds, marketed 92 percent of the

volume distributed by cooperatives. The 8 cooperatives distributing more than 40 million pounds of

butter each, accounted for 69 percent of cooperative butter sales. Volume of those distributing less

than 20 million pounds dropped 53 percent from

1987 to 1992 and accounted for only 8 percent of

volume distributed by cooperatives in 1992 versus

18 percent in 1987.

Dty Milk Products

Excluding inter-cooperative transfers, cooperatives distributed 904 million pounds of dry milk

products, 81 percent of the nation’s 1992 production (table 11). This volume included nonfat dry

milk, dry buttermilk, and dry whole milk. It represents a decrease in cooperatives’ share of total production, down from 91 percent in 1987.

Cooperatives in the Western region surpassed

the Central region in dry milk product sales-61

percent total cooperative volume in 1992. Dry milk

product volume declined 61 percent in the Central

region but increased in the Eastern (6 percent) and

Western (25 percent) regions. Share of U.S. production distributed by cooperatives increased in all but

the Central region.

The number of cooperatives distributing dry

milk products declined from 31 to 29 (table 12).

Two-thirds of cooperatives’ dry milk products was

distributed by 6 cooperatives in the more than 40-

million-pound size group. The 11 cooperatives that

distributed more than 20 million pounds had an 81

percent share of cooperative volume. The volume

distributed by cooperatives in all size groups

declined.

Cheese

In 1992, cooperatives distributed 2.8 billion

pounds of cheese, excluding cottage cheese, up 16

percent (table 13). During this period, the volume

of total cheese made by all U.S. firms increased 21

percent. As a result, cooperatives’ share of the

national cheese market decreased from 45 percent

to 43 percent.

Central region cooperatives continued to distribute the largest share of cheese-88 percent of

cooperatives’ net sales. Major decreases in both the

volume distributed and the share of the total manufactured occurred in the Mountain region. Pacific

region cooperatives reported a 53-percent volume

increase.

The number of cooperatives distributing

cheese declined from 94 to 75, reflecting consolidation of cheesemaking into fewer cooperatives (table

14). Cooperatives distributing less than 10 million

pounds annually declined from 64 to 51, while

those distributing more than 10 million pounds

dropped from 30 to 24. Only 11 large cooperative

cheese distributors accounted for 88 percent of all

cooperative cheese sales in 1992. The 5 largest

cooperatives accounted for 70 percent.

Among the 2.8 billion pounds of natural

cheese distributed by cooperatives, the vast majority (1.8 billion pounds or 64 percent) was Cheddar

cheese (table 15). Cheddar cheese sales were 75

percent of total U.S. production. Cooperatives marketed 569 million pounds of Mozzarella cheese or

29 percent of U.S. production of that type in 1992.

Other American cheese, at 290 million pounds, was

the third major cheese category of cooperatives’

sales, accounting for 54 percent of U.S. production.

Swiss cheese sales by cooperatives was 50 million pounds or 21 percent of U.S. Swiss cheese production. Ten million pounds of cream cheese, or 2

percent of national production, was marketed by

cooperatives. Cooperatives also marketed 7.5 million pounds of Muenster cheese and 11.5 million

pounds of Brick, Feta, Gouda/Edam, and others.

8
Packaged Fluid Milk Products

Cooperatives distributed 8.9 billion pounds of

packaged fluid milk products in 1992, reversing the

1980-87 decline, both in volume and share of total

sales of all U.S. firms (table 16). The cooperative

volume of packaged fluid milk products increased

21 percent, while the cooperative market share was

16 percent, up from 14 percent. Simultaneously,

U.S. sales increased by 4 percent.

In this report, pounds of packaged fluid milk distributed by cooperatives are converted from quart

equivalents of products sold. Total industry sales

are based on total pounds of milk sold to plants

and dealers less the whole milk equivalent used in

manufacturing.

Both volume distributed and share of all sales

grew in all regions except the Western. The Central

region volume was up 36 percent and South

Atlantic region up 73 percent. Western region

recorded a 42 percent loss in volume.

The number of cooperatives distributing packaged fluid milk products decreased from 34 to 29

(table 17). The 10 large-scale cooperative distributors (each sold more than 100 million quart-equivalents) held 90 percent of all cooperative sales.

Cottage Cheese

In 1992, cooperatives distributed 166 million

pounds of cottage cheese, down 15 percent or 29

million pounds (table 18). Cooperatives’ share of

total U.S. production remained at 13 percent,

reflecting the same national volume decline.

Twenty-two cooperatives distributed cottage

cheese, down from 23 in 1987 (table 19). Four cooperatives, each distributing more than 10 million

pounds a year, accounted for 72 percent of all cooperatives’ sales in 1992.

Ice Cream and Ice Milk

While cooperatives were still a minor player

in the ice cream and ice milk business, their share

of the Nation’s production of these frozen products

increased from 8 to 10 percent (table 18). Ice cream

and ice milk sales by cooperatives increased 25 percent while U.S. production decreased 4 percent.

The number of cooperatives distributing these

products was unchanged at 21 (table 20). Only 5

cooperatives, each with sales of more than 10 million gallons, distributed 93 percent of total cooperative volume.

Ice Cream Mix and Ice Milk Mix

In 1992,21 cooperatives reported sales of 81

million gallons of ice cream mix and ice milk mix

or 13 percent of U.S. production (table 18). This

does not include mixes used by cooperatives to

make ice cream or ice milk.

Bulk Condensed Milk Products

In 1992, U.S. firms produced 1,624 million

pounds of bulk condensed milk. Simultaneously,

cooperatives sold 439 million pounds or 27 percent

of total U.S. production, down from 45 percent.

Dry Whey Products

The percentage of dry whey products sold by

cooperatives dipped from 53 percent to 48 percent

of total U.S. production. In 1992, cooperatives distributed 920 million pounds of dry whey products,

net of inter-cooperative transfers. As with many

other products, some large-scale cooperatives distributed most of the dry whey products.

Cooperative Concentration Ratios

The largest cooperatives’ proportion of all

cooperatives’ receipts of grade A milk from farmers, milk processed or manufactured, and sales of

selected products for 1980,1987,1992 are shown in

table 21. It also shows the larger cooperatives’ proportion of receipts, processed or manufactured volume, and sales as a percent of total U.S. production. However, it should be noted that the

cooperatives included in each size group are not

the same for each product. For example, the four

largest cooperatives selling butter are not necessarily the four largest marketing cheese.

9
The 20 largest cooperatives, in terms of

receipts of grade A milk, received 59 percent of the

total U.S. volume of grade A milk, up from 56 percent in 1987. However, their volume represented 72

percent of grade A milk marketed by farmers

through cooperatives, down from 74 percent.

The 20 largest cooperatives with processing and

manufacturing operations accounted for 84 percent

of all processing and manufacturing volume by

cooperatives, up from 81 percent in 1987. The volume was 48 percent of the total U.S. milk volume

sold to plants and dealers, up from 34 percent.

In 1992, the 20 largest cooperatives had an overwhelming share among cooperatives of these products: packaged fluid milk distribution, 100 percent

(rounded); butter, 97 percent; dry milk products, 97

percent; and natural cheese, 96 percent.

However, compared with the Nation’s total

production, their shares were less significant. The

20 largest dairy cooperatives sold only 16 percent

of the Nation’s packaged fluid milk and 42 percent

of cheese. They dominated only in marketing the

so-called last resort products: butter and dry milk

products, even though their market shares of these

two products declined.

The four largest cooperatives in each product

line continued to sell a significant proportion of

total cooperative volume. Their shares of total U.S.

production of packaged fluid milk products and

cheese increased somewhat, while shares of U.S.

butter and dry milk products have declined.

METHODS OF PRICING MILK

TO PAY MEMBER-PRODUCERS

Dairy cooperatives were asked to describe

methods of pricing members’ milk. Information on

pricing incentive programs was also collected.

One hundred fifty-three cooperatives reported

on their pricing methods. They represented 58 percent of all dairy cooperatives and accounted for 86

percent of milk the Nation’s cooperatives received

directly from member-producers (table 22).

Difference between the percentages indicates

responding cooperatives were larger in terms of

volume than those not responding.

The four basic pricing methods are:

1. Traditional method of paying for milk

adjusted for butterfat.

2. Traditional method of paying for milk

adjusted for butterfat, and for other components.

3. Pricing on milk components.

4. Basing price on product yields.

Forty-six cooperatives (30 percent of respondents) used the most traditional way, representing

a substantial decrease (40 cooperatives) from 1987.

A variation is adjusting milk price not only for

butterfat but also for other component(s). Eightyone cooperatives (53 percent of the respondents)

used this method, up 31 cooperatives from 1987.

Twelve cooperatives priced members’ milk on its

components, up 7 cooperatives.

Two cooperatives based milk price on product

yields, or having this pricing option available to

members if they preferred. Several cooperatives

used more than one pricing method.

PRICING INCENTIVE PROGRAMS

Among cooperatives providing the pricing

information, 122 offered an incentive program to

induce members to produce high-quality milk, and

at the time and volume suited to cooperatives’

operations (table 23). The 122 represented 46 percent of all (265) dairy cooperatives and 69 percent

of all members’ milk.

Quality premiums only were offered by 23

cooperatives; 2 cooperatives offered only volume

premiums; protein premium, seasonal premium,

and solids-not-fat premium were each offered by

one cooperative. Another cooperative offered both

volume and protein premiums.

Most cooperatives offered quality premiums

in connection with other incentives. These cooperatives usually require farmers to meet certain quality requirements to qualify for other premiums.

Thirty-one cooperatives offered quality, volume,

and protein premiums; 21 offered quality and protein premiums; and 13 offered quality, volume, and

solids-not-fat premiums. Incentive programs

offered by 116 of the 122 cooperatives (95 percent)

were related to quality.

10
Table 1-Dairy cooperatives by type of operation and by headquarters region, 1980,1987 and 1992

Ftegion 1

Processing and Operating milk Not physically

manufacturing receiving handling dairy

dairy products facilities only products

1980 1987 1992 1980 1987 1992 1980 1987 1992

Total

1980 1987 1992

New England

Middle Atlantic

East North Central

West North Central

South Atlantic

South Central

Mountain

Pacific

All regions

Percentage of total

cooperatives

7 6

15 10

93 55

42 24

9 6

3 3

9 5

14 12

- -

192 121

44

3 1

9 5

35 7

19 77

4 0

3 4

4 1

9 2

- -

66 97

41 32 22

0

4

3

35

1

1

0

0

-

44

15

0 4 2 2

6 90 78 75

1 18 17 17

36 5 18 17

0 7 5 8

1 6 3 3

0 5 2 3

0 11 6 10

- ---

44 146 131 135

PWCLW?f

17 34 44 51

12 8 5

110 92 90

118 75 53

124 77 72

16 12 12

13 7 7

15 7 7

27 18 19

---

435 296 265

100 100 100

1 For states included in each region,see figure 1.

11
Table P-Cooperatives distributing selected dairy products, by headquarters region, 1980,1987, and 1992 1

Region *

Item and year New Middle

England Atlantic

East West

North North

Central Central

SOUth SOUth

Atlantic Central Mountain Pacific Total

Bulk whole milk

1980

1987

1992

Packaged fluid

milk products

1980

1987

1992

Bulk cream

1980

1;:;

Ice cream

1980

1987

1992

Natural Cheese

1980

1987

1992

Cheddar

Other American

Mozzarella

Other Italian

Other Cheese

Butter

1980

1987

1992

f$$at dry

1980

1987

1992

Dy9;py products

Ycgutl

1992

10

Z

5

3

1

:

2

2

:

3

Z

3

I

;

0

1

t

2

Z

2

0

2

102

- 88

84

fl

3

6

:

120

;:

15

:

18

15

7

12

:

x

4

z:

22

20

::

2

::

34

11

:

5

4

Number

::

12

!

4

S

4

3

:

:

4

2

1

:

:,

1

1

2

2

1

0

3

13

5

2

f

;

3

1

:

:

2

:

3

3

:

:

;

2

;

2

3

1

23

16

17

!Z

3

8

7

ii

3

Z

2

s

7

7

37

1

1

;:

9

11

:

3

3

1 Data were tabulated by cooperative’s headquarters location. A cooperative may distribute several products.

* For states included in each region, see figure 1.

12
Table 3-Cooperattve share of milk dellvered to plants and dealers, volume by reglon,

1980,1987, and 1992 l

Region 2

Item and year

Northeast South Atlantic Central Mountain Pacific

United

States

Million pounds

Handled by

cooperatives 3

1980 15,033 5,222 61,671 3,834 9,874 95,634

i 987 15,047 5,121 66,469 4,790 14,371 i 05,798

1992 15,624 6,936 71,618 5,271 23,173 122,622

U.S. total delivered to

plants and dealers

1980

i 987

1992

Cooperative percentage

of region or U.S. total

1980

i 987

1992

23,439 9,301

25,740 9,279

26,143 9,805

64 56

58 55

60 70

68,927 5,864 17,186 124,717

73,877 7,535 22,661 i 39,082

74,345 10,332 2a,i 79 i 48,804

Percent

a9 65 57 77

90 64 63 76

96 51 a2 a2

1 Cooperative data wera tabulated by their headquarters locations.

* For states included in each region, see figure 2.

’ Handled either by physical receipt or by bargaining transactions. Volumes shown include both amounts

marketed directly for farmers and small amounts purchased from other concerns. Excludes intercooperative transactions.

13
Table 4-Marketing share of COopeIWive members’ milk, by grade, productlon region, and number of

producers, 1987 and 1992 l

Year and

region *

Grade A milk Manufacturing grade milk Total milk

Number of

Coopera- Marketing Coopera- Marketing Coopera- Marketing producers

tlves 3 Volume share 4 tives 3 Volume share 4 tives 3 Volume share 4 delivering

1987

New England

Middle Atlantic

East North Central

West North Central

South Atlantic

East South Central

West South Central

Mountain

Pacific

All regions 6

1992

New England

Middle Atlantic

East North Central

West North Central

South Atlantic

East South Central

West South Central

Mountain

Pacific

All regions 6

No.

10

93

69

109

19

9

7

11

20

264

8

87

48

71

19

11

8

13

22

234

Ml. lb.

3,178

12,552

27,842

14,371

7,516

3,391

5,820

5,434

13.988

94,092

3,145

13,257

32,390

15,834

8,985

2,472

6,763

7,902

22,529

113,277

Pd.

72

59

86

92

82

67

85

83

63-

76

71

61

92

89

92

47

80

83

81 -

81

No. Ml. lb

0 0

4 73

63 3,571

107 4,609

(5) PI

3 170

(5) (5)

(5) (5)

10 247

144 9,050

0 0

6 100

38 2,423

72 2,666

3 9

(5) (5)

(5) P)

3 116

10 201

135 5,606

Pet.

0

75

50

72

(5)

34

(51

(5)

43

-

57

0

100

71

67

16

PI

(5)

15

43

-

62

No

10

96

82

118

19

9

7

1 1

20

289

8

91

57

78

19

11

8

13

22

256

Ml. lb.

3,178

12,625

31,413

18,980

(5)

3,561

(5)

(5)

14.235

103,142

3,145

13,357

34,813

18,500

8,994

(5)

(5)

8,018

22,730

Pet.

72

59

80

86

81

64

85

76

63-

71

62

90

85

92

(5)

(5)

78

81 -

80

3,672

16,343

47,378

33,361

4,772

4,659

4,698

2,513

3,207

120,603

2,982

14,577

49,015

27,376

4,124

3,229

3,959

1,769

3,409

1 lndudes milk either physically received by cooperatives or marketed by bargaining transactions. lndudes only milk from farmer members,

and excludes milk received from nonmembers or from cooperative and noncooperative firms.

* For states included in each region, see figure 3.

3 Cooperatives having members in the region, but not necessarily headquartered there.

4 Cooperafve member volume as a percentage of milk sold to plants during 1987 and 1992.

9 Regions not shown when fewer than 3 cooperatives reported or individual cooperative operations might be disclosed.

6 Numbers of cooperatives do not add to totals because some receive milk from more than one region.

14
Table 5-Cooperatives’ marketing and bargaining of grade A and manufacturing grade raw whole milk, by

headquarters region 1987 and 1992

Region 1

Product and source Eastern Central Western Total

Cooperatives Volume Cooperatives Volume Cooperatives Volume Cooperatives Volume

1987

Grade A milk:

Farmers

Noncooperatives

Other cooperatives

Total 2

Manufacturing grade

milk:

Farmers

Noncooperatives

Other cooperatives

Total 2

1992

Grade A milk:

Farmers

Noncooperatives

Other cooperative

Total 2

Manufacturing grade

milk:

Farmers

Noncooperatives

Other cooperatives

Total 2

No.

120

8

24

123

7

0

0

7

110

12

20

113

11

1

2

11

Ml. lb.

33,841

747

4.606

39,194

262

0

0

262

34,314

1,362

5,153

40,829

316

3

36

No.

120

34

41

121

126

6

44

127

96

3

8

97

100

5

6

Ml. lb.

43,183

119

2,909

46,211

8,445

42

923

9,410

52,824

4

3.309

56,137

5,181

174

289

5,644

No.

24

5

9

24

25

3

8

25

Ml. lb.

18,507

118

447

535

-

24

28,124

26

529

28,679

No.

264

47

74

268

144

7

46

231

18

36

235

123

Ml. lb.

95,531

984

7,962

104,477

9,242

42

947

10,231

115,262

1,392

8,991

125,645

6,298

1 For states included in each region, see figure 4.

2 Numbers of cooperatives do not add to total because some receive milk from more than one source.

- Negligible

15
Table CUtillzation of cooperatively marketed milk, by headquarters region, 1987 and 1992 1

Year and Utilization

1987

Sold raw

Processed or

manufactured

Eastern

Volume Percent

Ml. lb.

26,808 67.9

12,648 32.1

Region 1

Central Western Total

Volume Percent Volume Percent Volume Percent

Ml. lb. Ml. lb. Ml. lb.

28,080 50.5 7,737 39.4 62,625 54.6

27,541 49.5 11,894 60.6 52,083 45.4

Total 39,456 100.0 55,621 100.0 19,631 100.0 114,708 100.0

1992

Sold raw

Processed or

manufactured

28,902 73.3 35,281 58.9 15,112 52.7 79,295 62.0

10,526 26.7 24,612 41 .l 13,551 47.3 48,688 38.0

Total 39,428 100.0 59,893 100.0 28,663 100.0 127,983 100.0

1 For milk received from all sources, including from other cooperatives.

* For states included in each region, see figure 4.

16
Table ‘I--Number of plants owned and operated by cooperatives performlng various marketing functions,

by plant location, 1992

Region t

Marketing Functfon New

England

East West East West

Middle North North south south SOUth

Atlantic Central Central Atlantic Central Central Mountain Pacific Total

12 21

2 2

0 1

0 0

3 3

6 5

2 3

0 2

2 4

1 3

2 3

0 0

1 7

13 25

78 126 12 5

39 24 0 0

18

2

9

17

3

0 2

1 1

15 1 1

13 18 13 3

9 15

10 18

1 2

0 1

Receive and ship milk

Make American cheese

Make ftalian cheese

Make process cheese

Churn butter

Package fluid milk

Make dry products

Make dry whey products

Make condensed products

Make cottage cheese

Make ice cream

Not operated in 1992

Other activities

Total number of plants3

1 For states in&&d in each region, see figure 3.

* Cut of this total, 81 were receiving and shipping stations only.

3 Numbers of plants do not add to totals because some perform more than one function.

21

7

28

6

1 4

1 1

9

16

13

0

29

153

2 1

1 0 0

0 0

116 19 9

Number

11

4

3

1

3

4

5

3

4

0

1

0

1

13

7

4

3

2

2

5

1

3

2

2

2

0

1

11

20 2292

5 80

2 46

0 10

11 48

8 75

14

3

52

40

10

4

4

0

1

22

76

25

37

1

56

381

17
Table &Number of cooperatives reporting and net volume of whole milk sold raw, by reglon,

1980,1987, and 1992 l

Region 2

Northeast

Cooperatives reporting Volume sold raw

1980 1987 1992 1980 1987 1992

-________ Number _________ __________ Mi//ion pounds ____ __ ____

112 94 89 9,206 10,403 11,275

Percentage of all milk

marketed by cooperatives

1980 1987 1992

___________ Percent __________

61 58 72

South Atlantic 12 11 12 3,485 3,297 3,984 67 64 57

Central 193 123 105 33,331 32,925 40,137 54 50 56

Mountain 12 7 7 2,025 1,561 4,014 53 33 77

Pacific 23 16 17 4,448 5,702 10,564 45 40 46

--- --- - - -

All regions 352 251 230 52,495 53,640 69,974 55 51 57

1 Cooperative data were tabulated by their headquarters locations. Adjusted for intercooperative transactions. Includes purchases from other

sources. Vdume covered by bargaining is included.

2 For states included in each region, see figure 2.

18
Table 9-Volume and percentage of butter distributed by cooperatives compared with total U.S.

Table 9-Volume and percentage of butter distributed by cooperatives compared with total U.S.

productlon, by reglon, 1980,1987, and 1992 l

Region z

Item and year

Eastern Central Mountain Pacific

United

States

1,000 pounds

Distributed by

cooperatives 3

1980

19874

1992

96,492 468,267 23,283 145,104 733,146

69,775 402,757 21,556 287,766 781,738

124,019 371,344 11,292 378,666 885,321

Total manufactured

by all firms

1980

i 987

1992

161,046

i 28,707

178,794

710,782

631,342

698,293

33,358

34,150

20,397

Percent

240,068 1 ,145,254

309,936 1,104,135

467,680 1,365,164

Cooperative percentage

of total manufactured

1980

19874

1992

60 66 70 60 64

54 64 63 93 71

69 53 55 al 65

1 Cooperative data were tabulated by their headquarters location.

* For states included in each region, see figure 2. Note that the Eastern region in this case is the combination of the Northeast and South

Atlantic regions.

3 Adjusted for intercooperative transactions. Includes purchases from other sources.

4 Revised.

19
Table lO--Slzs groups of dairy cooperatives distributing butter, 1980,1987, and 1992

Size group (1,000 pounds)

Item and year Less than 2,500 - 20,000 - 20,000 - 40,000

2,500 19,999 and over 1 39,999 and over Total

Number

Number of

cooperatives

1980

1987

1992

Percentage of

cooperatives

1980

1987

1992

Group volume 3

1980

1987

1992

112 24

53 18

44 9

76 16 8 -

65 22 14 -

65 13 10

12

11

-

-

7

Percent *

1,000 pounds

-

-

8

-

-

12

148

82

68

100

100

100

27,840 241,881

16,243 144,784

9,087 66,469

643,754

756,043

-

-

201,774

Percent 2

- 913,475

- 917,070

625,446 902,776

Group volume as

percentage of total

cooperative volume

1980

1987

1992

3 26 70 - - 100

2 16 82 - - 100

1 7 22 69 100

1 This size group was not further divided prior to 1992.

* Percentages for a particular year may not add to 100 due to rounding.

3 Volume not adjusted for intercooperative transactions.

- Data Not available

20
Table 11Volume of dry milk products distributed by cooperatives compared with total U.S. production, by

region, 1980,1987, and 1992 l

Region 2

Item and year

Eastern

United

Central Western states

1,000 pounds

Distributed by

cooperatives s

1980

1987

1992

Total manufactured

by all firms

1980

1987

1992

Cooperative percentage

of total manufactured

1980

1987

1992

178,623 697,531 251,247 1,125,401

113,405 601,985 441,968 1 ,157,358

119,956 233,993 550,462 904,411

252,129

195,484

198,667

70 ‘100 7 2 8 7

58 ‘103 8 9 91

60 7 8 9 0 81

695,498

584,341

298,812

Percent

346,595 1,294,222

498,283 1,278,108

613,991 1,111,470

1 Cooperative data were tabulated by their headquatters locations. lndudes nonfat dry milk, dry whole milk, and dry buttermilk.

2 For states included in each region, see figure 2. Note that the Eastern region is the combination of the Northeast and South Atlantic regions.

The Western Region is the combination of the Mountain and Pacific regions.

1 Adjusted for intercooperative transactions. Includes purchases from other sources.

4 Reflects slightly different reporting periods (fiscal versus calendar year) and/or inventory adjustments.

- Data not available

21
Table 12-Size groups of dalty cooperatives distributing dry milk products, 1980, 1987, and 1992

Size group (1,000 pounds)

Item and year Less than 10,000 - 20.000 ’ 20,000 40.000

10,000 19,999 and over 39,999 and over Total

Number of

cooperatives

1980

i 987

1992

Percentages of

cooperatives

1980

i 987

1992

Group volume 3

i 980

i 987

1992

Group volume as

percentage of total

cooperative volume

1980

i 987

1992

la

10

a

38 23

32 32

28 34

68,016 152,999

52,994 152,040

16,387 151,898

5

5

2

11

10

10

12

13

17

Number

19 -

11 -

5

Percent 2

-

-

6

48

31

29

40 - - 100

36 - - 100

17 21 100

1,000 pounds

i ,058,533 - - 1,279,549

964,907 - - 1,169,941

136,642 601,721 906,648

Percent *

a2

a2

- - 100

- - 100

15 66 100

1 This size group was not further divided prior to 1992.

* Percentage for a particular year may not add to 100 due to rounding.

3 1992 volume not adjusted for intercooperative transactions.

- Data not available

22
Table 13-Volume of cheese marketed by cooperatives compared with total U.S. productlon, by reglon,

1980,1987, and 1992 l

Region 2

Item and year

Eastern Central Mountain Pacific

United

States

Cheese marketed by

cooperatives 3

1980

1987

1992

336,302

36,940

Total manufactured

by all firms

1980

1987

1992

560,155

1 ,015,657

Cooperative percentage

of total manufactured

1980

1987

1992

60

4

1,347,041 106,424 83,468 1,873,235

4 2,100,030 191,334 132,973 2,424,337

2,487,799 90,649 204,085 2,819,473

2,951,683 211,135 261,293 3,984,266

4 4,492,213 270,423 581,728 5,344,364

4,144,784 416,392 911,458 6,488,291

46 50 32 47

4 47 71 23 45

60 22 22 43

1,000 pounds

Percent

1 1992 cooperative data were tabulated by their headquarters locations. Includes all types of natural cheese except cottage cheese.

* For states included in each region, see figure 2. Eastern region is combination of Northeast and South Atlantic regions.

J lndudes purchases from other sources, some of which may be manufactured in another area. Does not include purchases from other

cooperatives.

4 Combination of the Eastern and Central regions to protect confidentiality.

23
Table 14-SCize groups of dairy cooperatives distributing cheese, 1980,1987, and 1992

Size group (1,000 pounds)

Item and year Less than 10,000 - 20,000 40,000 100,000

10,000 19,999 39,999 99,999 and over Total

Number of cooperatives

1980

1987

1992

Percent of cooperatives

1980

1987

1992

Group volume *

1980

1987

1992

Group volume as

percentage of total

cooperative volume

1980

1987

1992

125 13

64 10

5 1 8

79 8

69 11

68 11

243,485 202,297

125,068 154,182

72,538 115,573

12 10 12 17 49 100

5 6 7 27 55 100

3 4 6 18 70 100

5 158

4 94

5 75

3

4

7

986,289 2,012,471

1,336,550 2,424,339

1,977,245 2,831,943

100

100

100

1 Percentages for some years may not add to 100 due to rounding.

2 Volume not adjusted for intercooperative transactions.

8 7

6 10

5 6

Percent 1

5 5

6 11

7 8

1,000 pounds

237,479 342,921

161,862 646,677

160,458 506,129

Percent 1

24
Table 15-Volume of cheese, by type, marketed by cooperatives and comparisons

with U.S. productlon, 1992 l

Region 2

Cheese type

Eastern Central Mountain Pacific

United

States

Marketed by cooperative 3

Cheddar

Other American

Mozzarella

Other Italian

Other Cheese

Total, natural cheese

Manufactured by all firms

Cheddar

Other American

Mozzarella

Other Italian

Other Cheese

Total, natural cheese

Cooperative percentage of total

manufactured

Cheddar

Other American

Mozzarella

Other Italian

Other Cheese

Total, natural cheese

29,144 1,594,907

1,461 222,102

(4) 537,230

(5) 76,280

5,272 57,282

36,940 2,487,799

145,434 1,747,632 203,742

1,920 338,124 (4)

(4) 1,532,706 (4)

(5) 272,085 58,238

247,248 674,034 (5)

1 ,015,657 4,144,784 416,392

20 91

76 66

(4) 35

(5) 28

2 8

4 60

1,000 pounds

20,825

(41

(4)

0

(5)

90,649

Percent

10

(41

(4)

0

(4)

22

159,465 1,804,341

66,647 290,210

31,647 568,877

(5) 77,364

(5) 79,183

204,085 2,819,473

303,892 2,400,700

195,817 535,861

436,400 1,969,106

(5) 539,471

(5) 1,043,153

911,458 6,488,291

5 2 75

3 4 54

7 29

(5) 14

(5) 8

2 2 43

1 Cooperative data were tabulated by their headquarters locations. Includes all types of cheese except cottage cheese.

2 For states included in each region, see figure 2. Eastern region is combination of Northeast and South Atlantic regions.

3 Includes purchases from other sources, some of which may be manufactured in another area. Does not include purchases from other

cooperatives.

4 lnduded in the next region.

* lnduded in the United States.

25
Table 18-Volume of packaged fluid milk products dlstrlbuted by cooperatives compared with all

processors, by rsgbn, 1980,1987, and 1992 l

Distributed by Total distributed by Cooperative percentage

Region * cooperatives 3 all processors 4 of total

1980 1987 1992 19w) 1987 1992 1980 1987 1992

___________-______________________ /t&//ion pounds __________________________________ ____________ Percent____________

Northeast 1,945 1,737 1,749 13,377 13.821 13,877 15 13 13

South Atlantic 1,149 722 1,246 6,660 6,766 7,362 17 11 17

Central 4,097 3,930 5,358 20,332 21,931 20,767 20 18 26

Western 1,010 972 564 10,263 11,799 14,590 10 8 4

--- --- - - -

All regions 8,201 7,361 8,917 50,632 54,317 56,596 16 14 16

1 Cooperative data were tabulated by their headquarters locations. Based on gallon-equivalent of products sold.

2 For states included in each region, see figure 2. Western region is the combination of Mountain and Pacific regions.

3 Adjusted for intercooperative transactions.

4 Estimated, based on total pounds of milk sold to all plants and dealers less whole milk equivalent used in manufactured products,

26
Table 17-Size group of dairy cooperatives distributing packaged fluid milk product, 1980,1987, and 1992

Number of Percentage of

cooperatives cooperatives

1980 1987 1992 1980 1987 1992

_-___- Num&r _________ __________ Percent__________

Group volume 1

1980 1987 1992

------ 1,000 quart equivalent------

Percentage of total

cooperative volume

1980 1987 1992

----_____ Percent__________

Lesst han

1,000 10 4 6 17 12 21 1,512

l,OOO-19,999 22 12 4 30 35 14 159,894

20,000-

49,999 6 3 6 10 9 21 199,526

50,000-

99,999 6 6 3 10 18 10 423,304

100,000

andover 15 9 10 25 26 34 3,039,357

- - - ---

Total 59 34 29 100 100 100 3,823,593

402

99,928

138 (2) (2) (2)

17.252 4 3 (21

129,749 173,036 5 4 4

443,546 203,983 11 13 5

2,672,126 3,754,550 79 80 90

---

3,345,751 4,148,959 100 100 100

1 Volume not adjusted for intercooperative transfers.

* Less than 0.5 percent.

27
Table W-Volume of selected products distributed by cooperatives compared with total U.S. productlon,

1980,1987, and 1992

Product

Distributed by Total U.S. Cooperative

cooperatives 1 manufactured percentage of total

1990 1997 1992 1990 1987 1992 1980 1987 1992

Mllion pounds

Bulk condensed milk 139 622 439 952 1,383 1,624 15 45 27

Cottage cheese 220 195 166 1,004 1,519 1,289 22 13 13

Dry whey products 560 913 920 690 ? ,739 1,900 81 253 48

Yogurt 3 - - 56 - - 1,823 - - 3

Million gallons

Ice cream mix and

ice milk mix 41 73 81 605 693 644

Ice cream and

ice milk 118 98 123 1,123 1,256 1,204

1 Adjusted for intercooperative transactions. Includes purchases from sources other than cooperatives.

2 Revised.

3 Includes plain and fruit-flawed yogurt and frozen yogurt.

- Data not available

7 1 1 13

11 8 10

28
Table 194lze groups of dalfy cooperathres distributing cottage cheese, 1980,1987, and 1992

Number of Percentage of Percentage oftotal

COOpretiVeS cooperatiws Group volume l cooperative volume

1980 1987 1992 1980 1987 1992 1980 1987 1992 1980 1987 1992

Lessthan 500 16 5 10 36 21 46

500 - 999

l,OOo-2,499 7 2 0 16 9 0

2,500-4,999

5,000-9,999 7 5 4 16 22 16

10,000

andover

Total

-- Number --- _- _____ - pemt ---------- --- l,o[x) quafl equivalent ------ __-____ Permnt _________

3 3 0 7 13

4 2 4 9 9

7 6 4 16 26

- - - - -

44 23 22 100 100

0

16

16

-

100

1,716 493 1,456 1 (2) 1

2,611 2,229 0 1 1 0

10,202 P) 0 4 (31 0

15,748 '11,411 15,449 7 '6 9

56,616 31,048 29,234 24 15 18

145,063 160,390

--

119,583 63 78 72

---

232,156 205,571 165,722 100 100 100

1 Vdume not aquebd for intercooperative transactions.

* Less than 0.5 percent.

3 lnduded in the next size group.

4 lndudes the previous size group.

29
Table 2O-Slze groups of dairy CoOpefWveS distributing Ice cream and Ice milk, 1980,1987, and 1992

Size group

(l,O@Igallons)

Less than 100

Number of

cooperatives

1990 1997 1992

________ Number _________

Percentage of Percentage of total

cooperatives Group volume 1 cooperative volume

1980 1987 1992 1980 1987 1992 1990 1987 1992

__________ Percent t ____ ______ _______________ 1,000 gallons_--________ ------__ Permnt Z_________

14 8 7 37 38 33 466 184 135 (3) (3) (3)

1,216 3,249 1 1 3

(4) (4) 3 (4) (4)

‘8,047 ‘5,788 15 ‘8 ‘5

(4) 0 27 (4) 0

’ 88,336 113,925 54 591 93

- - -

97,763 123,097 100 100 100

100 -999 6 4 6 16 19 29 1,580

1,000-l ,999 3 2 2 8 10 10 4,037

2,000-3,999 6 2 1 16 10 5 17,186

4,000-9,999 5 2 0 13 10 0 31,702

10,000

and over

Total

4 3 5 10 14 24 63,362

- - - - - - -

38 21 21 100 100 100 118,333

1 Volume not adjusted for intercooperative transactions.

2 Size group percentages do not add up to 100 due to rounding.

3 Less than 0.5 percent.

4 Included in the next size group.

5 Includes the previous size group.
Table 21-Percentage of grads A milk received from farmers, milk processed or manufactured, and selected product sales for

largest dairy cooperatlves, 199&1987, and 1992 l

sales

Rewiptsof Milk

g-A -or Padcaoed Nalurd

Item miHc2 malufacalred fluid mifk E

190019871992 19a 1907 1992 19801987 lm2 19001~7'1992 19801m719w 1s8o19871994

P6tCtWregeOfdoooperelivesales

share d total a3ot3erative volume:

4 largest cooperatives 32 32 36 32 37 35 39 58 81 4% 47 48 41 50 53 53 55 68

8 largest cooperatives 454844 47 55 56 587785 81 89 89 587373 73 88 80

20 largest aq3eratives 86 74 72 88 81 84 89 98 100 04 94 97 849497 78 8896

Share of total U.S. volume:

4 largest cooperatives 26 25 25 19 15 20 8 8 10 26 33 30 384643 19 25 29

8 largest cooperatives 363536 27 23 32 9 10 13 364945 50 88 59 26 31 35

20 largest coopsratives 52 56 59 403448 14 13 18 53 88 83 74 88 79 36 40 42

1 Groups of cooperatives may change from function to h~nction. Volume adjusted for intercooperative ttamacti~n~.

~GradeAmilkreceivedfmmfanners.

’ Revii.

Y
Table 22-FVicing methods used by dairy cooperatives to pay for member milk, 1987 and 1992

Number of

cooperatives

Method of pricing member milk w=w3 Milk volume

1987 1992 1987 1992

1. Traditional method of paying for milk

adjusted for butterfat 86 46 37,082 7,165

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

Traditional method of paying for milk

adjusted for butterfat, and for other component(s)

Pricing on milk components

Basing priie on product yields

Using both methods 1 and 2

Using both methods 1 and 3

Using both methods 1 and 4

Using both methods 2 and 3

Using both methods 2 and 4

Using both methods 3 and 4

Using methods 1,2 and 3

Using all methods: 1 through 4

Total responding

50

7

3

3

0

1

1

2

0

2

0

12

2

0

2

0

3

3

2

0

2

155 153

Percentage of total cooperatives 52 58

81 33,292

10,159

409

1,724

0

(11

0

(1)

0

-_______Mij/& poem&________

54,283

17,813

(1)

0

(1)

0

5,032

1,753

(1)

0

(11

89,457

Percent

87

102,215

86

1 Not reported tc avoid revealing proprietary information.

32
Table 23-Prlclng Incentives offered by dalry cooperatives, 1992

Number of

Incentive cooperatives reporting

Number

Milk volume

Million lbs.

Quality only 23 5,309

Volume only 2 (1)

Protein only 1 (1)

Seasonal only 1 (1)

Solids-not-fat only 1 (11

Volume and protein 1 (0

Quality and volume 5 584

Quality and protein 21 8,367

Quality and seasonal 1 (1)

Quality and solids-not-fat 4 8,689

Quality, volume, and protein 31 30,313

Quality, volume, and seasonal 1 (1)

Quality, volume, and solids-not-fat 13 351

Quality, protein, and seasonal 2 (1)

Quality, protein, and shipping quota 1 (1)

Quality, protein, and solids-not-fat 2 (1)

Quality, volume, protein, and seasonal 6 9,589

Quality, volume, protein, and solids-not-fat 4 7,870

Quality, protein, seasonal, and shipping quota 1 (1)

Quality, volume, protein, seasonal, and solids:not-fat

Percentage of all dairy cooperatives

1 Not reported to avoid revealing proprietary information.

1

122

46

Percent

(1)

81,788

69

* U.S. GOVERNMENT PRINTING OFFICE: 1904 300-098/00028 33
Y

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. The United States Department of Agriculture (USDA) prohibits discrimination

in its programs on the basis of race, color, national origin, sex, religion, age, disability,

political beliefs and marital or familial status. (Not ail prohibited bases apply to ail

programs). Persons with disabilities who require alternative means for communication of

program information (braille, large print, audiotape, etc.) should contact the USDA Office

of Communications at (202) 720-7808 (TDD).

To file a complaint, write the Secretary of Agriculture, U.S. Department of Agriculture,

Washington, D.C. 20250, or call (202) 720-7327 (voice) or (202) 720-1127 (TDD). USDA

is an equal employment opportunity employer.