United States

Department of 

Agriculture

Rural Development

Rural Business-Cooperative Programs

Research Report 230 Marketing 

Operations 

of Dairy 

Cooperatives, 

2012
For questions about this report, or cooperatives in general, contact USDA Cooperative Programs at: 

coopinfo@wdc.usda.gov, or (202) 720-7558. USDA maintains an on-line library of more than 100 publications about cooperatives at: www.rurdev.usda.gov/BCP_Coop_LibraryOfPubs.htm. Free hard 

copies of some of these publications are also available. Requests can be made via the contacts provided 

above. USDA also publishes “Rural Cooperatives” magazine bimonthly. The current and past issues can 

be viewed online at: www.rurdev.usda.gov/BCP_Coop_RurCoopMag.html.

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers. If you believe 

you experienced discrimination when obtaining services from USDA, participating in a USDA program, 

or participating in a program that receives financial assistance from USDA, you may file a complaint with 

USDA. Information about how to file a discrimination complaint is available from the Office of the Assistant Secretary for Civil Rights.

To file a complaint of discrimination, complete, sign and mail a program discrimination complaint form, 

available at any USDA office location or online at www.ascr.usda.gov, or write to:

USDA

Office of the Assistant Secretary for Civil Rights

1400 Independence Avenue, S.W.

Washington, D.C. 20250-9410

Or call toll free at (866) 632-9992 (voice) to obtain additional information, the appropriate office or to request documents. Individuals who are deaf, hard of hearing or have speech disabilities may contact USDA 

through the Federal Relay service at (800) 877-8339 or (800) 845-6136 (in Spanish). USDA is an equal 

opportunity provider, employer and lender.

Persons with disabilities who require alternative means for communication of program information (e.g., 

Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and 

TDD). 

Cover photo courtesy Dairylea Cooperative
Marketing Operations of Dairy Cooperatives, 2012 i

ABSTRACT

Just under 42,000 member-producers, owners of the 

Nation’s 132 dairy cooperatives, marketed 161.2 

billion pounds of milk, or 81 percent of all U.S. 

milk marketed, in 2012. Including milk received 

from non-members and non-cooperative firms, total 

milk handled by cooperatives was 167.7 billion 

pounds (of which 3 billion pounds was organic 

milk), or 84 percent of the national share. Fortyseven cooperatives operated milk plants and receiving facilities. Cooperatives marketed 75 percent 

of the Nation’s butter, 91 percent of nonfat and 

skim milk powders, 22 percent of natural cheeses, 

and 43 percent of dry whey products. Eighty dairy 

cooperatives reported having 22,969 full-time and 

816 part-time employees. Eighty-nine cooperatives 

reported that for the fiscal year, on a per-hundredweight (cwt) basis: total assets were $10.90; total 

liabilities were $8.12; total equity was $2.78; and 

net margin before taxes was 22 cents, or a returnon-equity of 8 percent.

Key Words: Cooperatives, milk, dairy products, 

marketing.

MARKETING OPERATIONS OF DAIRY COOPERATIVES, 2012

K. Charles Ling

Agricultural Economist

USDA Rural Development

Research Report 230

May, 2014
ii Marketing Operations of Dairy Cooperatives, 2012

PREFACE

Information for this report came primarily from 

the responses to a USDA survey of all U.S. dairy 

cooperatives that is conducted once every 5 years. 

The dairy-specific data were collected in conjunction with the annual survey of all cooperatives by 

the Cooperative Programs’ Statistics Staff of USDA 

Rural Development. In some cases, data were estimated for non-respondents based on their financial 

statements or other sources.

Cooperatives were asked to supply information 

on their milk-marketing operations for the fiscal 

year ending in calendar 2012. These fiscal years 

vary within the calendar year, so the data reflect 

some differences in time periods.

When calculating cooperative marketing shares 

of various products, information for U.S. total milk 

volumes came from the statistics reported by USDA 

National Agricultural Statistics Service: Milk Production, Disposition and Income, 2012 Summary, 

April 2013; and Dairy Products, 2012 Summary, 

April 2013. Marketing share calculations are approximate, because cooperatives’ fiscal years vary 

and do not exactly match the calendar year.

The cooperation of the responding cooperatives 

and the statistics staff is gratefully acknowledged.

The historical summaries of the results of this and 

previous surveys may be accessed at http://www.

rurdev.usda.gov/BCP_Coop_Data_DairyMarketing.

html.

.
Marketing Operations of Dairy Cooperatives, 2012 iii

ABSTRACT i

PREFACE ii

HIGHLIGHTS v

Marketing Operations of Dairy Cooperatives, 2012 1

Cooperative Industry Profile 1

Milk Volume and Utilization 2

Member Supply and Location 3

Plant Operations 5

Dairy Products Marketed 6

Cooperative Sizes 7

Concentration Ratio 8

Employees 9

Financial Performance 9

TABLES AND FIGURES

Table 1: Dairy cooperatives by type of operation and by headquarters region, 2007 and 2012 1

Table 2: Cooperatives marketing selected dairy products, 2007 and 2012 2

Table 3: Cooperative share of milk marketed by producers, 2007 and 2012 2

Figure 1: Number of Cooperatives Operating in Each Region, Member-Producers, Member

 Milk, and Milk per Producer, 2012 3

Table 4: Utilization of milk marketed by cooperatives, 2007 and 2012 3

Table 5: Number of cooperatives operating in each region, member-producers, member milk, 

 and milk per producer, 2007 and 2012 4

Table 6: Number of dairy plants owned and operated by cooperatives performing various 

 marketing functions, by plant location, 2007 and 2012 5

Table 7: Selected dairy products marketed by cooperatives, 2007 and 2012 6

Table 8: Selected dairy products marketed by cooperative and shares of U.S. production, 

 2007 and 2012 7

Table 9: Size of dairy cooperatives in terms of milk marketed by members, 2007 and 2012 8

Table 10: Share of milk marketed by members of dairy cooperatives, 2007 and 2012 9

Table 11: Number of employees reported by 80 dairy cooperatives, 2012 9

Table 12: Aggregated balance sheet of 89 dairy cooperatives, 2012 10

Table 13: Aggregated income statement of 89 dairy cooperatives, 2012 10

CONTENTS
iv Marketing Operations of Dairy Cooperatives, 2012
Marketing Operations of Dairy Cooperatives, 2012 v

HIGHLIGHTS

Member-producers of dairy cooperatives marketed 161.2 billion pounds of milk in 2012, a 

5.7- percent increase from 2007. This volume 

represented 80.9 percent of the milk marketed by 

farmers nationally, a decrease from 82.6 percent 5 

years earlier. (Cooperative shares of the Nation’s 

milk and dairy product marketing are approximate, 

because cooperatives’ fiscal years vary and do not 

exactly match the calendar year.)

Including milk received from non-members and 

non-cooperative firms, total milk handled by cooperatives was 167.7 billion pounds, or 84 percent of 

national milk marketed. Three billion pounds of the 

volume was organic milk received by 24 cooperatives.

The number of dairy cooperatives during this 

5-year period decreased from 155 to 132. There 

were 47 cooperatives that processed and manufactured dairy products and operated receiving stations, 

and the other 85 had no milk-handling facilities. 

Sixty-six percent of total cooperative volume was 

sold as raw milk in 2012 versus 63 percent in 2007. 

The other 34 percent was manufactured at plants 

owned and operated by cooperatives.

 There were 41,999 member producers marketing 

milk in 2012, 15 percent (7,676) fewer than 5 years 

earlier. Three regions ― East North Central, North 

Atlantic, and West North Central ― together accounted for 86 percent of all member producers and 

53 percent of cooperative milk volume. The Western region was the top source of cooperative milk. 

At 59.4 billion pounds, it represented 37 percent of 

all cooperative milk.

Dairy cooperatives owned and operated 184 

plants, 13 of them for receiving and shipping milk 

only, 32 for manufacturing American cheese, 17 for 

making Italian cheese, 49 for packaging fluid milk 

products, 24 for churning butter, 35 for drying milk 

products, and 24 for drying whey products. Many 

other plants made various other dairy products or 

dairy-related products. (A plant may perform more 

than one function.)

Volumes of butter and nonfat and skim milk 

powders increased significantly from 2007 to 2012. 

Cooperative share of butter, at 1,396 million pounds 

(a 28-percent increase over 5 years), was 75 percent 

of U.S. production, and cooperative share of nonfat 

and skim milk powders, at 1,967 million pounds 

(a 36-percent increase), was 91 percent. However, 

cheese made by cooperatives decreased by 5 percent from 5 years earlier, to 2,386 million pounds 

and accounting for 22 percent (versus 26 percent 

in 2007) of U.S. production. Cooperative production of dry whey products increased 10 percent and 

cooperative share of national production increased 

slightly, from 42 percent to 43 percent in 2012.

As in 2007, there were four cooperatives that 

each handled more than 6 billion pounds of member milk in 2012. Together, the four increased their 

milk volume by 2 billion pounds and accounted 

for 47.8 percent of total cooperative milk in 2012. 

However, this was less than the 49.2 percent share 

reported 5 years ago. 

Both the cooperative number and the milk volume of the next size group (3-billion-to-6-billionpounds) increased over the 5-year period. This 

was the size group that showed the most significant 

increase in the share of total cooperative milk volume (from 22.9 percent in 2007 to 28.3 percent, a 

5.4-point increase).

 Together, the 14 cooperatives that were in these 

top 2 size groups (each cooperative marketed at 

least 3 billion pounds) had a 76.1 percent share of 

cooperative milk.

 The four largest cooperatives had a lower share 

of the Nation’s milk, moving from 40.7 percent in 

2007 to 38.7 percent in 2012. Broadening the focus 

to the largest 8 dairy cooperatives and the largest 

20, their shares of total U.S. milk also declined.

In terms of milk volume, the dominant position of 

dairy cooperatives relative to the rest of the industry 

declined slightly.

Fifty-three dairy cooperatives reported having 

22,969 full-time and 804 part-time employees in 
vi Marketing Operations of Dairy Cooperatives, 2012

2012, and 6 other cooperatives had 12 part-time employees. Another 21 cooperatives reported having 

no employees. These 80 cooperatives marketed 79 

percent of cooperative milk. The other 52 cooperatives did not supply data on their number of employees.

 Complete financial data submitted by 89 dairy 

cooperatives (out of the total of 132) showed that 

total assets for the fiscal year ending in 2012 were 

$13.9 billion ($10.90 per hundredweight), total liabilities were $10.4 billion ($8.12 per cwt), 

and total equity was $3.6 billion ($2.78 per cwt). 

Eighty-four percent of the equity was allocated 

to members. Net margin before taxes was $285 

million (22 cents per cwt), a return on equity of 8 

percent. Together, these cooperatives marketed 79 

percent of total cooperative milk volume, with 15 

reporting that their dairy sales included $1.5 billion 

of dairy exports.
Marketing Operations of Dairy Cooperatives, 

2012

K. Charles Ling

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, the 

number of cooperatives is declining, but those remaining are handling larger volumes. In addition to 

marketing milk, many cooperatives own and operate 

plants to process, manufacture, and market various 

dairy products.

This report, 10th in a series of periodic appraisals of the scope and performance of dairy cooperatives, describes their continuing evolution in an ever 

changing market environment.

Cooperative Industry Profile

Between 2007 and 2012, the number of dairy 

cooperatives decreased by 23 (15 percent), from 

155 to 132. The pace was slower than the reduction 

of 39 cooperatives (20 percent) recorded from 2002 

to 2007. In 2012, 111 (84 percent of all dairy cooperatives) were headquartered in the North Atlantic, 

East North Central, and West North Central regions; 

the North Atlantic region had 

the most with 45 dairy cooperatives (table 1).

All regions showed a drop 

in dairy cooperative numbers from 2007, except the 

South Atlantic region, which 

gained one. The North Atlantic region had the steepest 

reduction, 10, followed by 

a reduction of 7 in the West 

North Central region and 5 in 

the Western region (see figure 

1 for region demarcation).

In 2012, 47 cooperatives 

(36 percent of all dairy cooperatives) operated milk-handling facilities (milk plants 

or receiving facilities), a drop 

of 10 from 2007. The drop occurred in every region, except in the South Atlantic and South Central 

regions. The East North Central region still had the 

most cooperatives (21) with plants and milk receiving facilities.

Cooperatives that did not have plants or milkreceiving facilities decreased from 98 to 85. Almost 

half of these were in the North Atlantic region. 

However, the 41 such cooperatives in that region 

represented a decrease of 7 from 2007, the steepest 

drop among the regions that showed a decline. The 

South Atlantic and East North Central each gained 

one such cooperative.

One-hundred-fourteen dairy cooperatives sold at 

least some bulk raw milk (table 2). The number of 

cooperatives that marketed dry milk products (nonfat dry milk, dry whole milk, and dry butter milk) 

and dry whey products (dry whey, whey protein 

concentrates and isolates, and lactose) increased, 

with those that made whey protein concentrates and 

isolates registering the most increase. Making the 

first appearance in the table are nine cooperatives 

that marketed skim milk powder. The number of co1

 

Operating Not operating

milk plants or milk plants or

Region1 receiving facilities receiving facilities Totals

2007 2012 2007 2012 2007 2012 

 ------------------------------Number------------------------------

North Atlantic 7 4 48 41 55 45

South Atlantic 2 2 3 4 5 6

East North Central 23 21 12 13 35 34

West North Central 14 12 25 20 39 32

South Central 1 1 2 1 3 2

Western 10 7 8 6 18 13

All regions 57 47 98 85 155 132

 

 ------------------------------Percent------------------------------

 

Share of total co-ops 37 36 63 64 100 100

1

Figure 1 shows States by region

Table 1 Dairy cooperatives by type of operation and by 

headquarters region, 2007 and 2012
2 Marketing Operations of Dairy Cooperatives, 2012

operatives marketing butter and natural cheeses all 

decreased, except Italian cheese (increased by two) 

and Swiss cheese (unchanged).

Milk Volume and Utilization

In 2012, cooperative 

member-producers marketed 161.2 billion pounds of 

milk, or 80.9 percent of milk 

marketed by all U.S. producers (table 3). The cooperative 

share of milk was a decrease 

of 1.7 points from 2007, when 

it was 82.6 percent. Over the 

5-year period, milk marketed 

by cooperative members increased 5.7 percent, while the 

increase was 8 percent by all 

U.S. producers. (Cooperative 

shares of national marketing 

of milk and dairy products 

are approximate, because 

cooperatives’ fiscal years vary 

and do not exactly match the 

calendar year.)

Milk received from nonmembers and non-cooperative firms almost doubled 

when compared with 2007. 

In total, cooperatives handled 

or bargained for 167.7 billion pounds of milk, or 84.1 

percent of total volume 

marketed by all U.S. producers. Cooperative share was a 

fraction (0.3 point) lower than 

in 2007.

Of the 167.7 billion pounds 

of milk handled by cooperatives in 2012, 3 billion 

pounds was organic milk 

received by 24 cooperatives.

Cooperatives marketed 66 

percent of the milk volume 

they handled as bulk raw 

milk (including the volume 

shipped to plants that cooperatives had investment in), up 3 points from 2007 

(table 4). In other words, cooperatives processed or 

manufactured 34 percent of the milk in the plants 

they owned and directly operated.

 5-year 

 2007 2012 change

 ----Number of cooperatives----

Bulk raw milk 136 114 -22

Butter 19 15 -4

Nonfat dry milk 14 16 +2

Skim milk powder2 9

Dry whole milk 5 7 +2

Dry buttermilk 10 13 +3

Natural cheeses other than cottage cheese 31 25 -6

 American cheese 18 16 -2

 Italian cheese 6 8 +2

 Swiss cheese 4 4 0

 Other (specialty) cheeses 15 14 -1

Cottage cheese 6 6 0

Sour cream 8 6 -2

Packaged fluid milk products 13 10 -3

Yogurt 6 6 0

Dry whey 11 12 +1

Whey protein concentrates & isolates 6 11 +5

Lactose 4 6 +2

1

A cooperative may market several products.

2

Separately counted for 2012.

Table 2 Cooperatives marketing selected dairy products,

2007 and 20121

 Cooperative 

share

Milk from of U.S. total

Milk from sources other Total milk United Total

member- than handled by States Member milk

producers cooperatives2 cooperatives3,4 total milk handled

 -----------------------Million Pounds------------------------ ----Percent----

2007 152,514 3,272 155,786 184,565 82.6 84.4

2012 161,222 6,451 167,673 199,362 80.9 84.1

 ----------------------------Percent---------------------------- 

5-year 

change 5.7 97.2 7.6 8.0

1

Cooperatives’ fiscal years vary and do not exactly match the calendar year.

2

Milk from nonmembers and non-cooperative firms.

3

Handled by physical receipt, bargaining or servicing transactions, excluding inter-cooperative volume.

4 2012 total includes 2,997 million pounds of organic milk received by 24 co-ops.

Table 3 Cooperative share of milk marketed by producers, 

2007 and 20121
Marketing Operations of Dairy Cooperatives, 2012 3

Member Supply and 

Location

There were 41,999 cooperative member-producers 

marketing milk in 2012. Most 

(17,323 member-producers) 

were in the East North Central region, followed by the 

North Atlantic region (10,693 

member-producers) and the 

West North Central region 

(8,165 member-producers). 

Together, these regions had 

86 percent of total member 

producers, but only 53 perFigure 1 Number of Cooperatives Operating in Each Region, Member-Producers, 

 Member Milk, and Milk per Producer, 2012

East North Central

47 co-ops

17,323 producers

42.9 billion pounds

2.5 million lbs. per producer

North Atlantic

53 co-ops

10,693 producers

22.1 billion pounds 

2.1 million lbs. per 

producer 

South Atlantic

13 co-ops

1,709 producers

7.4 billion pounds

4.3 million lbs. per 

producer

West North Central

42 co-ops

8,165 producers

20.2 billion pounds

2.5 million lbs. per producer

South Central

12 co-ops

1,629 producers

9.3 billion pounds

5.7 million lbs. per producer

Western

16 co-ops

2,480 producers

59.4 billion pounds

23.9 million lbs. per producer

 

Year Milk marketed Utilization rate

 --Million pounds-- --Percent--

2007 

 Sold raw2 98,288 63

 Processed or manufactured 57,498 37

 Total 155,786 100

 

2012 

 Sold raw2 110,481 66

 Processed or manufactured 57,192 34

 Total 167,673 100

1

Excludes inter-cooperative volume and includes milk from non-member producers and 

non-cooperative firms.

2

Includes milk shipped to plants that cooperatives had investment in.

Table 4 Utilization of milk marketed by cooperatives, 

2007 and 20121
4 Marketing Operations of Dairy Cooperatives, 2012

cent of member milk (table 5).

Following the national trend of decreasing dairy 

farm numbers, dairy cooperatives reported a 15-percent decline in the number of member-producers 

in 5 years — from 49,675 to 41,999. The greatest 

decline in the number of member-producers was 

in the East North Central region, which had 2,932 

(14 percent) fewer member-producers. The West 

North Central region had 1,995 (20 percent) fewer 

member-producers, and the number in the North 

Atlantic was 1,385 (11 percent) fewer. However, 

percentage-wise, the South Central region had the 

steepest decline, a 30-percent decrease in memberproducers.

Every region of the Nation seemed to be adequately served by dairy cooperatives. The South 

Central region was served by 12 cooperatives, while 

53 cooperatives had members in the North Atlantic 

 Co-op

 regional

Cooper- Member- Member Milk per share of 

Year and region2 atives3 producers milk producer milk4

 -------Number----- ----Million pounds--- Percent

2007 

 North Atlantic 62 12,078 20,428 1.69 76

 South Atlantic 10 2,118 7,350 3.47 94

 East North Central 47 20,255 37,675 1.86 91

 West North Central 49 10,160 19,192 1.89 97

 South Central 11 2,328 9,788 4.20 83

 Western 21 2,736 58,081 21.23 76

 Total 49,675 152,514 3.07 82.6

 

2012 

 North Atlantic 53 10,693 22,078 2.06 80

 South Atlantic 13 1,709 7,362 4.31 92

 East North Central 47 17,323 42,923 2.48 92

 West North Central 42 8,165 20,238 2.48 97

 South Central 12 1,629 9,266 5.69 71

 Western 16 2,480 59,356 23.93 72

 Total 41,999 161,222 3.84 80.9

 1

Cooperatives’ fiscal years vary and do not exactly match the calendar year.

2

Figure 1 shows States by region.

3

Cooperatives having member-producers in the region.

4

Cooperative member milk volume as a percentage of regional volume marketed by 

producers.

Table 5 Number of cooperatives operating in each region, 

member-producers, member milk, and milk per 

producer, 2007 and 20121

region.

In 2012, the Western 

region remained the top 

source of cooperative milk 

volume. The 2,480 memberproducers there (6 percent of 

all dairy cooperative members) marketed 59.4 billion 

pounds of member milk. 

This represented 37 percent 

of member milk marketed 

by all cooperatives; the share 

was slightly lower than the 

38 percent reported in 2007. 

The East North Central 

region accounted for 27 percent of total member milk 

volume, an increase of two 

points from 2007. The North 

Atlantic and West North 

Central regions, respectively, 

supplied 14 and 13 percent 

of the total U.S. cooperative 

member volume.

All regions except the 

South Central increased milk 

volumes from cooperative 

members. The greatest increase was in the East North 

Central region, up 5.2 billion 

pounds in 5 years, a 14- percent increase. The North 

Atlantic region showed an increase of 1.7 billion 

pounds, up 8 percent.

Milk deliveries per member-producer were 

up in all regions in the last 5 years. Nationally, it 

increased 25 percent, from 3.07 million pounds 

to 3.84 million pounds. Per-member delivery was 

highest in the Western region, at 23.93 million 

pounds. However, percentage-wise, this was only 

13 percent higher than in 2007. Compared to other 

regions, the increase in per-member delivery ranged 

from 22 percent in the North Atlantic to 35 percent 

in the South Central region.

There were three regions in which cooperative 

regional share of milk decreased: South Central, 

Western, and South Atlantic. The declines, respectively, were from 83 to 71 percent, from 76 to 72 

percent, and from 94 to 92 percent.
Marketing Operations of Dairy Cooperatives, 2012 5

Plant Operations

Three regions are used in 

reporting locations of dairy 

plants: the Atlantic region 

(combination of the North 

and South Atlantic regions in 

figure 1); the Central region 

(combination of the East 

North Central, West North 

Central, and South Central 

regions); and the Western 

region.

Cooperatives owned and 

operated 184 dairy plants in 

2012, 9 fewer than in 2007 

(table 6). Almost two-thirds 

of the plants (119 plants, 

or 65 percent) were in the 

Central region (mainly East 

North Central and West North 

Central). The region was also 

the most prominent in almost 

all categories of dairy plants, 

except for churning butter 

and drying milk products. 

The Western region had the 

most plants for manufacturing butter and dry milk 

products.

The Western region had 4 

more plants in 2012 than in 

2007, the Atlantic region had 

1 fewer plant, and the Central 

region had 12 fewer plants 

operated by cooperatives.

Thirteen plants served only as milk-receiving 

stations, compared with 17 in 2007. Processing and 

manufacturing operations were carried out in 171 

plants, 5 fewer than 5 years ago.

Forty-nine cooperative plants packaged fluid milk 

products, the same number as in 2007. The Central 

region had the most, with 34, but that was 1 plant 

fewer than 5 years ago. The western region gained 

one plant, to seven plants, and the number of fluid 

product plants remained at eight in the Atlantic 

region.

The number of plants manufacturing butter, 24, 

remained the same as in 2007. Thirty-five plants 

manufactured dry milk products (other than dry 

whey products), down four from 5 years earlier.

Many manufacturing operations were devoted to 

cheesemaking―32 plants made American cheese, 

17 made Italian, and 18 made other cheeses. The 

number of plants making American cheese was 

down by two from 2007; the number for other types 

of cheese remained the same. The Central region 

had the most cooperative plants making cheese in 

every category.

In 2012, cultured products were made in 15 coop-

 Region2

Marketing function Atlantic Central Western Total 

 -------------------------------Number--------------------------- 

2007 

Receive and ship milk3 0 13 4 17

Churn butter 5 11 8 24

Make dry products 8 15 16 39

Make American cheese 4 24 6 34

Make Italian cheese 1 14 2 17

Make other cheeses 1 17 0 18

Package fluid milk 8 35 6 49

Make cultured products 2 8 1 11

Make ice cream 0 8 3 11

Make condensed products4 1 2 1 4

Make dry whey products 2 18 4 24

Other dairy-related activities 8 13 5 26

Total5 27 131 35 193 

2012 

Receive and ship milk3 0 10 3 13

Churn butter 5 8 11 24

Make dry products 8 10 17 35

Make American cheese 3 23 6 32

Make Italian cheese 1 13 3 17

Make other cheeses 0 18 0 18

Package fluid milk 8 34 7 49

Make cultured products 3 8 4 15

Make ice cream 0 7 1 8

Make condensed products4 1 1 0 2

Make dry whey products 2 16 6 24

Other dairy-related activities 7 28 12 47

Total5 26 119 39 184

1

All dairy plants, including joint-venture plants operated by co-ops.

2

Atlantic region=North and South Atlantic in figure 1; Central region=East North Central, 

West North Central, and South Central.

3

Facilities that only performed milk receiving and shipping functions.

4

Plants that only condensed milk as final products without further processing on site.

5

Total number of dairy plants (some plants performed multiple functions in the same 

plants).

Table 6 Number of dairy plants owned and operated by 

cooperatives performing various marketing 

functions, by plant location, 2007 and 20121
6 Marketing Operations of Dairy Cooperatives, 2012

erative plants, an increase of 

4 from 2007, while the number of plants that made ice 

cream decreased by 3 to only 

8 plants. Dry whey products 

were made in 24 cooperative 

plants, the same number as 5 

years ago.

Most notable was a significant increase in the number 

of plants that made dairyrelated products. Forty-seven 

plants made products that are 

not categorized in table 6, an 

increase of 21 plants (81 percent increase) from 2007.

Dairy Products Marketed

This section and the accompanying tables (tables 

7 and 8) describe the net 

volumes of selected dairy 

products marketed by cooperatives. Comparisons are 

made between the volumes 

marketed by cooperatives and 

total U.S. production.

Butter: Cooperatives 

churned 1,396 million pounds 

of butter in 2012, up 28 percent from 2007. Cooperative 

share of U.S. production increased from 71 percent 

to 75 percent.

Dry milk products: Cooperatives marketed 1,967 

million pounds of nonfat and skim milk powders 

(nonfat dry milk, skim milk powders, and dry skim 

milk for animal) in 2012, an increase of 36 percent 

from 5 years ago. Combined, they had a 91-percent 

share of U.S. production of these dry milk products, 

though the share was lower than the 96 percent 

reported in 2007.

Cooperatives more than doubled dry whole milk 

production and increased dry buttermilk production 

by more than 80 percent in 5 years. They marketed 

68 percent of the Nation’s dry whole milk, up from 

51 percent in 2007. Their share of dry buttermilk 

was 89 percent, up from 65 percent in 2007.

 

Item 2007 2012 5-year change 

 ---------------Thousand Pounds------------- Percent

Butter 1,087,012 1,396,363 309,351 28

Dry milk products

 Dry whole milk 16,322 39,783 23,461 144

 Dry buttermilk 53,043 96,609 43,566 82

 Nonfat and skim 

 milk powders 1,444,395 1,967,341 522,946 36

 Nonfat dry milk, 

 human1 1,357,782 1,929,236 571,454 42

 Skim milk powders1 83,790 36,864 -46,926 -56

 Dry skim milk, 

 animal1 2,823 1,241 -1,582 -56

 Milk protein 

 concentrates 64,410

 

Natural cheeses other 

 than cottage cheese 2,512,713 2,385,980 -126,733 -5

 American cheese 1,698,485 1,513,174 -185,311 -11

 Blue and Gorgonzola 13,701

 Specialty2 13,010

 Hispanic 6,503

 Italian cheese 742,830 732,572 -10,258 -1

 Muenster 13,183

 Swiss cheese 36,921 31,363 -5,558 -15

 Not separately identified 

 & all other cheese 34,477 62,475 27,998 81

 

Dry whey and modified 

 whey products 1,027,144 1,125,349 98,205 10

 Dry whey, and reduced 

 lactose and minerals 739,877 678,781 -61,096 -8

 Whey protein concen-

 trates & isolates 171,077 195,878 24,801 14

 Lactose 116,190 250,690 134,500 116

1

Nonfat dry milk (human) may be over-counted and skim milk powders and dry skim milk 

(animal) under-counted, because some cooperatives reported the three products as a 

lump sum number.

2

Includes Cream and Neufchatel, Feta, and Gouda.

Table 7 Selected dairy products marketed by cooperatives, 

2007 and 2012

Milk protein concentrates is a new line of dry 

milk product being reported. Cooperative share of 

this new product category, at 64 million pounds, 

was 63 percent of national production.

Cheese : In 2012, cooperatives marketed 2,386 

million pounds of natural cheeses, excluding cottage cheese, a decline of 5 percent from 2007. As 

a result, cooperative share of U.S. natural cheese 

production decreased by 4 points, from 26 percent 

to 22 percent.

Among natural cheeses produced by cooperatives, just under two-thirds (1,513 million pounds 

or 63 percent) was American cheese, followed by 

Italian cheese (733 million pounds or 31 percent).

American cheese made by cooperatives was 

down 11 percent from 2007, while U.S. production 
Marketing Operations of Dairy Cooperatives, 2012 7

 

Co-op Co-op

Item 2007 co-ops 2007 U.S. share 2012 co-ops 2012 U.S. share 

 ----Thousand Pounds---- Percent -----Thousand Pounds----- Percent

Butter 1,087,012 1,532,717 71 1,396,363 1,859,554 75

Dry milk products

 Dry whole milk 16,322 31,746 51 39,783 58,132 68

 Dry buttermilk 53,043 81,386 65 96,609 109,132 89

 Nonfat and skim milk powders 1,444,395 1,503,992 96 1,967,341 2,154,913 91

 Milk protein concentrates 64,410 102,318 63 Natural cheeses other than 

 cottage cheese 2,512,713 9,776,785 26 2,385,980 10,890,144 22

 American cheese 1,698,485 3,877,214 44 1,513,174 4,358,477 35

 Blue and Gorgonzola 13,701 87,940 16

 Hispanic 6,503 224,259 6

 Italian cheese 742,830 4,198,800 18 732,572 4,633,627 16

 Muenster 13,183 152,630 9

 Swiss cheese 36,921 313,689 12 31,363 320,599 10

 Not separately identified & 

 all other cheese 34,477 1,387,082 2 75,484 1,112,612 7 Dry whey products 1,027,144 2,420,250 42 1,125,349 2,620,581 43

 Dry whey, and reduced 

 lactose and minerals 739,877 1,231,798 60 678,781 1,088,565 62

 Whey protein concentrates 

 & isolates 171,077 432,928 40 195,878 505,890 39

 Lactose 116,190 755,525 15 250,690 1,026,126 24

1

Cooperatives’ fiscal years vary and do not exactly match the calendar year.

Table 8 Selected dairy products marketed by cooperatives and shares of U.S. 

production, 2007 and 20121

increased 12 percent, resulting in a lower cooperative share, 35 percent versus 44 percent in 2007.

In the same 5 years, cooperative Italian cheese 

marketing decreased by 1 percent, and cooperative 

share of U.S. total Italian cheese dipped 2 points, to 

16 percent.

Cooperative Swiss cheese production in 2012 was 

31 million pounds, 15 percent lower than in 2007. 

Cooperative share of U.S. production was down to 

10 percent.

There are several new cheese categories tracked, 

including: Blue, Gorgonzola, Hispanic, and Muenster. Cooperative shares of these cheeses were, 

respectively, 16 percent, 6 percent, and 9 percent.

Cooperatives also marketed 75 million pounds of 

other cheese, including cheese that was not separately identified above or was not categorized. Among 

these were several specialty cheeses: Cream, Neufchatel, Feta, and Gouda, of which 13 million pounds 

was produced.

Dry whey and modified whey products: In 2012, 

cooperatives marketed 1,125 million pounds of dry 

whey and modified whey products, up 10 percent 

from 2007, while U.S. production increased 8 

percent in the same period, resulting in cooperative 

share increasing by 1 point, to 43 percent. Among 

dry whey and modified whey products, cooperative production of dry whey and reduced lactose 

and minerals whey decreased by 8 percent, while 

production of whey protein concentrates and isolates increased by 14 percent and lactose more than 

doubled. Respectively, these three categories of 

whey products had 62, 39, and 24 percent share of 

U.S. productions.

Cooperative Sizes

There were four cooperatives that each handled 

more than 6 billion pounds of member milk in 2012, 

the same as in 2007 (table 9). The milk volume of 

the four increased by 2 billion pounds and accounted for 47.8 percent of cooperative milk in 2012, but 

the share was 1.4 points lower than the 49.2 percent 

reported for 2007.
8 Marketing Operations of Dairy Cooperatives, 2012

The number of cooperatives in the next size 

group (3 billion to 6 billion pounds of milk) increased by 2, to 10, by 2012. The milk volume of 

this group occupied a 28.3-percent share of cooperative milk, an increase of 5.4 points from 2007. 

This was one of the only two size groups to show 

an increase in cooperative number, milk volume, 

and share of cooperative milk over the 5 years. Furthermore, this group’s 5.4-point share increase far 

surpassed the other group (0.5-billion-to-1-billionpound group).

The 2-billion-to-3-billion-pound group saw a 

decrease of two cooperatives from 2007, and the 

group’s share of cooperative milk decreased by 3.1 

points, from 8.2 percent to 5.1 percent.

In the 1-billion-to-2-billion-pound group, the 

number of cooperatives also dropped by two, from 

11 to 9. This size group’s share of cooperative milk 

decreased, by 1.4 points.

The 0.5-billion-to-1-billion-pound group included 11 cooperatives in 2012, three more than in 

2007. This group (along with the 3-billion-to-6-billion-pound group) was one of the two groups that 

showed an increase in cooperative number, milk 

volume, and share of cooperative milk; the share 

increase was 1.6 points.

Twenty-seven cooperatives were in the group 

that marketed between 100 million and 500 million 

pounds of milk in 2012, a decrease of 5 cooperatives. Together, this group had a 3.6-percent share 

of cooperative milk, down from 4.4 percent in 2007.

There were 68 cooperatives in the smallest 

sized group, which marketed less than 100 million pounds of milk each in 2012. This was a steep 

(22 percent) decline from 2007, when 87 cooperatives in this group were counted. The group’s milk 

volume held only a 1.5-percent share of cooperative 

milk, a decline from the 1.8-percent share in 2007.

The 14 largest sized cooperatives in the 2 largest 

size groups (greater than 3 billion pounds of milk 

each) accounted for 76.1 percent of cooperative 

milk.

Concentration Ratio

A measure commonly used to gauge the concentration of a sector (or market) is the share occupied 

by the four largest firms in the sector.

The share of the largest four dairy cooperatives 

decreased to 47.8 percent of cooperative milk in 

2012, down from 49.2 percent in 2007 (tables 9 

and 10). Because increase in milk marketed by 

cooperative was lower than the increase in the total 

U.S. milk marketed (table 3), the largest four dairy 

cooperatives also had a lower share of the Nation’s 

milk, decreasing from 40.7 percent in 2007 to 38.7 

percent in 2012, a decrease of 2 points.

When the focus was expanded to the largest eight 

dairy cooperatives, their share of cooperative milk 

went down .8 point from 2007 to 2012 and went 

down 1.8 points as a share of U.S. milk.

Meanwhile, the largest 20 dairy cooperatives had 

a 0.8-point increase in their share of cooperative 

milk, while their share of the Nation’s milk decreased by 0.8 point.

In terms of milk volume, the relative position of 

dairy cooperatives to the rest of the industry, though 

still dominant, was a little bit less so.

 Share of Share of

Milk marketed by members Cooperatives cooperatives Member milk co-op milk

2007 2012 2007 2012 2007 2012 2007 2012

 ---Number--- ------Percent------ ----Million Pounds---- -----Percent----

More than 6 billion pounds 4 4 2.6 3.0 75,075 77,090 49.2 47.8

3 to 6 billon pounds 8 10 5.2 7.6 34,899 45,609 22.9 28.3

2 to 3 billon pounds 5 3 3.2 2.3 12,504 8,193 8.2 5.1

1 to 2 billion pounds 11 9 7.1 6.8 15,439 14,098 10.1 8.7

0.5 to 1 billion pounds 8 11 5.2 8.3 5,176 8,053 3.4 5.0

100 to 500 million pounds 32 27 20.6 20.5 6,740 5,770 4.4 3.6

Less than 100 million pounds 87 68 56.1 51.5 2,681 2,410 1.8 1.5

Total 155 132 100.0 100.0 152,514 161,222 100.0 100.0

Table 9 Size of dairy cooperatives in terms of milk marketed by members, 

2007 and 2012
Marketing Operations of Dairy Cooperatives, 2012 9

Employees

Fifty-three dairy cooperatives (40 percent of all dairy 

cooperatives) reported having 22,969 full-time and 804 

part-time employees in 2012 

(table 11). These cooperatives 

marketed 121 billion pounds 

of member milk, or 75 percent 

of cooperative milk.

(In addition to the main 

business of marketing milk, 

some cooperatives also 

handled farm supplies and/

or other commodities. Therefore, not all employees were 

engaged in the business of 

handling milk and dairy products.)

Six other cooperatives had 

only part-time employees. 

Together, these bargaining cooperatives reported having 12 

part-time employees. Twentyone cooperatives reported 

having no employees (though 

some out-sourced work to 

other firms).

These 80 cooperatives 

represented 61 percent of 

all dairy cooperatives and marketed 79 percent of 

cooperative milk. The remaining 21 percent of the 

milk was handled by the 39 percent of dairy cooperatives that did not supply employment information.

Financial Performance

Complete financial data submitted by 89 dairy 

cooperatives showed that their total assets for the 

fiscal year ending in 2012 were $13.9 billion (table 

12). Current assets accounted for $8.6 billion, and 

fixed assets (net property, plant, and equipment 

(PP&E) and other assets) were $4.4 billion. Dairy 

cooperatives invested almost $1 billion in other 

cooperatives and subsidiaries.

Total liabilities for the 89 cooperatives were 

$10.4 billion. They owed $6.9 billion in current li-

 Category 2007 2012

 ----------------Percent----------------

Share of cooperative vol ume 

 4 largest cooperatives 49.2 47.8

 8 largest cooperatives 62.3 61.5

 20 largest cooperatives 83.7 84.5

 

Share of total U.S. volume1 

 4 largest cooperatives 40.7 38.7

 8 largest cooperatives 51.6 49.8

 20 largest cooperatives 69.1 68.3

1

Cooperatives’ fiscal years vary and do not exactly match the calendar year.

Table 10 Share of milk marketed by members of dairy 

cooperatives, 2007 and 2012

 

Cooperatives Full-time Part-time Member

reporting employees employees milk

 ---------------Number------------- Million lbs.

Having full-time employees 53 22,969 804 120,980

Having only part-time employees 6 - 12 1,247

Having no employees1 21 - - 5,733

Total reported 80 22,969 816 127,960 -------------------------Percent----------------------- Share of total cooperatives 61 n.a.2 n.a. 79

1

Some of these cooperatives out-sourced work to other firms.

2

Not available.

Table 11 Number of employees reported by 80 dairy 

cooperatives, 2012

abilities and incurred $3.5 billion long-term debt.

Total equity, the balance of assets and liabilities, 

was $3.6 billion. Most equity (84 percent, or $3 billion) was allocated to members.

On a per-hundredweight-of-milk basis, total assets were $10.90, total liabilities were $8.12, and 

equity was $2.78.

The 89 cooperatives marketed 127.9 billion 

pounds of milk in 2012. They represented 67 percent of all dairy cooperatives and 79 percent of 

cooperative milk volume.

(Dairy cooperatives typically pay members for 

their milk twice a month. A large proportion of the 

current assets and the current liabilities are related 

to such periodic cash payments to members. This is 

a unique characteristic of the balance sheet of dairy 

cooperatives.)
10 Marketing Operations of Dairy Cooperatives, 2012

Total revenues reported 

by the 89 cooperatives were 

$48 billion (table 13). Of 

this amount, 77 percent ($37 

billion) was from milk and 

dairy products sales, 22 percent ($10.7 billion) was from 

supply and other sales, and 

less than 1 percent was from 

other income.

Of the $37 billion milk 

and dairy product sales, 

$1.5 billion (4 percent) was 

export sales, reported by 15 

cooperatives.

Subtracting total costs 

and expenses from total 

revenues, net margin before 

taxes was $285 million, or 

22 cents per hundredweight 

of milk marketed. This represents a before-tax return on 

equity of 8 percent. 

Some cooperatives reported the value of the milk 

they bargained for as sales in 

the income statements, while 

others did not. For this latter 

group, an estimated value of 

the milk that was bargained 

for was included in the milk 

and dairy products sales in 

order for the cooperative 

sales figures to be consistent. 

The estimated value is offset 

by the equal amount of the 

cost of goods sold and, therefore, does not affect the $285 

million net savings reported. 

Milk and dairy product sales 

may also include some intercooperative transactions, but 

they are also netted out to 

arrive at the total net savings 

of dairy cooperatives as a 

group.

 

 --Thousand Dollars--

Assets: 

Current assets 8,623,306 

Net PP&E1 and other assets 4,371,161 

Investments in other co-ops &subsidiaries 945,765 

Total assets 13,940,232 

 

Liabilities & equity:

Current liabilities 6,883,584 

Long-term & other liabilities 3,499,336 

Total liabilities 10,382,920

 

Equity 

 Common stock 1,163 

 Preferred stock 247,959 

 Allocated equity 2,980,614 

 Retained earnings & unallocated equity 270,680 

 Non-controlling minority interests 56,896

Total equity 3,557,312

 

Total liabilities and equity 13,940,232 

Number of dairy cooperatives reporting 89

Member milk (million pounds) 127,942

 

Total assets per hundredweight $10,90 

Total liabilities per hundredweight $8.12 

Total equity per hundredweight $2.78 

1

PP&E: Property, plant and equipment.

Table 12 Aggregated balance sheet of 89 dairy cooperatives,

2012

 

 --Thousand Dollars--

Milk & dairy product sales1 36,963,760 

Supply and other sales 10,684,699 

Service receipts, subsidiary and other income 306,622 

Total revenues 47,955,081 

 

Cost of goods sold 44,628,358 

Expenses 2,739,858 

Non-operating income & non-recurring losses 301,477 

Total costs and expenses 47,699,693 

Net margin before taxes 285,388 

 

Number of dairy cooperatives reporting 89 

Member milk (million pounds) 127,942 

 

Net margin before taxes per hundredweight $0.22 

Before-tax return on total equity 8.0%

1

Fifteen cooperatives reported export sales at a total of $1.5 billion.

Table 13 Aggregated income statement of 89 dairy 

cooperatives, 2012