Research Report 211

United States

Department of

Agriculture

U. S. Cooperatives in

International Trade, 

1997-2002

Preface This report describes export activity of U.S. agricultural producer-owned cooperatives

during the period 1997 through 2002. This activity is described in terms of dollar values

of exports by commodity group and destination market (region), shares of U.S. agricultural exports, as well as a profile of cooperatives engaged in international trade.

Methodology

USDA Rural Development Cooperative Programs began an annual survey of cooperative involvement in international markets in 1997. Before 1997, cooperative exports

and imports were measured at 5-year intervals.

Data for this report were gathered directly from cooperatives through a voluntary, mail

survey questionnaire. Cooperatives were asked to report dollar values of exports for

each calendar year 1997-2002. For exports, this included all sales normally recorded

by the cooperative as an international sale, with exceptions for products sold into U.S.

territories. Figures for non-respondents were generated from secondary sources, or

based on past performance, market conditions, and relative magnitudes of U.S.

exports or similar commodities.

To ensure confidentiality, survey results have been tabulated and presented so that no

single respondent is identifiable. This means that data for some commodities and

some markets are combined into subgroups in which at least three respondents are

represented.

Definitions

● A cooperative is a business organization owned, controlled, and benefiting the

people who use the organization--in this case, farmers.

● An export sale is defined as a shipment to a foreign destination except to U.S.

armed forces or U.S. diplomatic missions abroad, for their use; and U.S. territorial possessions Guam, Puerto Rico, and the Virgin Islands.

● Two main commodity categories and three subcategories are used in this

report: 

o Bulk commodities are high-volume, homogeneous products that have

received little or no processing, such as coarse grains, rice, wheat,

oilseeds, and cotton.

o High-value products (HVPs) are those commodities that have been subjected to a higher level of processing and/or require special handling.

HVPs can be further divided into three subcategories:

● Raw HVPs consist of unprocessed items with relatively high per unit

values, such as fresh fruit and live animals.

● Semi-processed HVPs are partially processed or “ingredient” products

that are generally not ready for final consumption and include flours,

oils, meals, and hides and skins.

i
Preface ● Processed HVPs are generally ready for final consumption at either

the food retail or food service level having been fully processed.

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

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Market Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Overview of Cooperative Export Results 199702002 . . . . . . . . . . . . . . . . . . . . . . . . . .2

Who Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Concentration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Size of Cooperative Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Export Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Export Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Product Category Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Bulk Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

High-Value Products (HVPs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

iii
U. S. Cooperatives in International 

Trade, 1997-2002

Tracey L. Kennedy

Introduction

Producer-owned cooperatives have long been an

important part of U.S. agriculture. Beginning as early

as 1810, cooperative enterprises in the U.S. have

helped farmers pool resources and share risk to weather uncertainties and correct imbalances in the market.1

Over the decades, cooperatives played an increasingly

important role, and by 1930, more than 12,000 cooperatives served nearly 3.1 million farmer-members in

every subsector of U.S. agriculture.2

The proportion of U.S. agricultural production

exported has increased from 2 percent in 1940 to

around 17 percent today.

3 Cooperatives continue to

play an important role in export markets. They have

served not only as originators of large volumes of bulk

commodities subsequently exported by other firms,

but have developed their own direct exporting capabilities, effectively capturing returns from exporting

previously lost to intermediaries. Indeed, many cooperatives have become the dominant exporters in their

particular commodity subsectors. Cooperatives have

also faced challenges over time-as have other firms-in

the face of changing market conditions and trading

dynamics.

The purpose of this report is to present an audit

of cooperative export activity for the period 1997 to

2002, describing the role of and magnitude of cooperative trading activity relative to U.S. agricultural trade

as a whole. The time period is significant in that it represents the first time that annual time-series data have

been available. Before 1997, USDA collected cooperative data at 5-year intervals.

Market Conditions

Market conditions, both internationally and

domestically, changed dramatically in the past 20

years. On the production side, fewer and larger farms

increasingly characterize U.S. agriculture. As farmers

caught in the cost-price squeeze were forced to abandon their operations, larger, more efficient farms have

picked up the slack in production so that now,

although farm numbers are down 60 percent, production has doubled. The structure of the cooperative sector was directly affected. In 1950, more than 10,000

cooperatives served over 6.5 million members and

recorded $8.7 billion in sales. By 2002, 3,140 cooperatives with 2.8 million members reported net business

volume of almost $100 billion.4

Technological advances and changes in trade policy effectively erased national borders for the movement of commodities, labor, capital, and information.

Income growth in much of the developing world has

changed the consumption habits of millions of consumers, resulting in drastic shifts in agricultural production and trade. Food manufacturing and retailing

continued to concentrate among fewer and fewer large

firms with the global presence and power to demand

precision in product attributes and delivery from producers. This created great opportunity for those willing and able to adjust in order to compete, as well as

greater uncertainty amidst this higher level of competition. But, while the U.S. produces more than the

domestic market can absorb and 95 percent of the

world's consumers reside outside the U.S., the compet1

1 David Cobia, editor, Cooperatives in Agriculture, p. 111,

Regents/Prentice Hall, 1989.

2 Cobia, p. 118.

3 USDA/Economic Research Service.

4 USDA/RBS website: www.rurdev.usda.gov/rbs/coops/data.htm.

“Number of Cooperatives & Memberships by Major Business

Activities,” 2002.
itiveness of U.S. producers in some markets was challenged by foreign producers with lower land and/or

labor cost, closer proximity to foreign markets, and

more favorable domestic policies.5

Compounding this are periodic upheavals in

national economies and financial markets, which now

have more far-reaching effects than ever. The period

covered in this report, 1997-2002, is in some ways an

anomaly in that the first 3 years were marked by a

regional financial crisis in Asia that spread to Brazil

and the former Soviet Union, then had ripple effects

around the world. The overall effect of currency depreciation, slowed economic growth, and high interest

rates in these countries affected agricultural production, consumption, and trade worldwide. In crisis

countries, lower consumption due to the higher cost of

imports and reduced income led to reduced exports to

those markets for U.S. producers. Although this

decline in volume was offset by increased export volume to other markets, export value fell 15 percent

between 1997 and 1999 due to low commodity prices.

These influences, especially the financial

upheaval in Asia and the continuing restructuring

among cooperatives, are reflected significantly in the

cooperative trade data presented here. Despite successes, the history of cooperative involvement in international markets has also been tempered by failure

challenges, stemming in many cases-in addition to the

uncertainties of international markets-from complications involving the same unique characteristics that set

cooperatives apart from other forms of business. For

example, the user-owner nature of cooperatives with

its requisite ties to a particular domestic production

base can limit the scope of their activities in foreign

markets, relative to their private- or investor-owned

competitors. Marketing cooperatives whose purpose is

to provide a home for members' products may be precluded by statutory limitations from taking full advantage of multiple sourcing strategies that noncooperative traders use to substitute lower cost products. In

low-margin businesses, such as the grain trade, the

ability to access low-cost products at the appropriate

time and market proximity is critical. In addition,

cooperatives, as owner-financed businesses, are often

insufficiently capitalized, limiting investment in technology and facilities, as well as in advertising and

market development activities necessary to differentiate and position products in the most lucrative markets.

However, some cooperatives are finding the flexibility to redefine their presence in international markets through partnerships, alliances, and marketing

agreements with other firms-cooperative- and

investor-oriented. These options allow cooperatives to

enhance their operational efficiencies and financial

strength, gaining access to marketing and transportation expertise, value-added opportunities and markets

that they may not have the wherewithal to access otherwise. For example, two cooperatives—MBG

Marketing and Naturipe—have in recent years allied

with the Chilean firm Hortifrut S.A. to form Global

Berry Farms to form a worldwide system for procurement and marketing of a full line of berries and berry

products. Sunkist, Inc. is now importing nonmember

fruit for sale in domestic markets. And DairyAmerica,

a marketing agency in-common, tied with the New

Zealand Dairy Board to market nonfat dry milk from

DairyAmerica's cooperative owners. Seald Sweet, a

major Florida citrus cooperative, joined with a Belgian

company, De Weide Blik, in 1998 to form a limited liability company to “provide the flexibility to work with

a number of commercial entities and the ability to raise

capital for new ventures.”6 These alternatives challenge the traditional cooperative identity and only

time will tell if the need to adapt to dynamic conditions in a global market through structural and operational innovation is compatible with the cooperative

mission of representing and protecting the interests of

particular sets of member-producers.

Overview of Cooperative Export Results 

1997-2002

Brisk sales in pre-recession Asian markets and

sharp increases in sales of bulk commodities led to

record cooperative export sales of nearly $7.9 billion in

1997. Following that record high, cooperative exports

were down more than 40 percent in 1998, reflecting

declining demand and the subsequent fall in commodity prices in Asian markets, as well as the economic

pressures related to currency devaluations and other

policy changes in other regions (Figure 1). A period of

recovery began in 1999-2000, but not to 1997 levels,

reflecting possible permanent shifts in consumption

and trading patterns, as well as in the structure of the

cooperative sector--namely, the exit of several significant cooperative players. Through 2002, the value of

agricultural exports by U.S. cooperatives dropped

2

5 USDA/ERS. “Agricultural Trade and the 1997-99 International

Financial Crisis,” Agricultural Outlook, Jan/Feb, 2000.

6 www.sealdsweet.com
more than 45 percent. U.S. agricultural exports, by

comparison, declined by only 7 percent over the same

period.

Value of exports by commodity category shows

similar patterns of decline with greater volatility evident in bulk commodity sales (primarily grains,

oilseeds, and cotton). Indeed, 84 percent of the

decrease in value of all cooperative exports over the

period can be attributed to bulk commodities, which

lost almost half their value in1998 and 1999, before

showing improvement in 2000, then dropping off

again in 2001 and 2002 (Table 1, Figure 2).

Only the processed HVPs category-mainly

processed fruits, vegetables, and meats—recovered to

surpass 1997 levels.

Exports of raw HVPs that consist primarily of

fresh fruits and tree nuts-products in which cooperatives have traditionally had a strong market presencehave lost around one-third of their value since 1997,

but have remained relatively stable since 1999-2000.

Fluctuations in bulk export values are consistent

with changes resulting from the Asian financial

upheaval, as well as the inherent volatility of the bulk

commodity trade. However, the magnitude of changes

in cooperatives' export sales-especially in bulk commodities--is significantly different than changes in U.S.

sales of the same commodities. Figures 3 and 4 show

percentage changes in values of cooperative exports of

bulk commodities and HVPs, respectively, compared

to values of U.S. sales of the same products.

3

Figure 1— Agricultural Exports by Cooperatives, 1997-2002

Million dollars

HVPs

Bulk

Table 1—Cooperative Exports by Category, 1997-2002 ($millions)

1997 1998 1999 2000 2001 2002

Bulk Commodities $ 5,482 $2,609 $ 2,591 $ 3,997 $ 2,969 $2,472

Raw High-Value Products 931 827 616 657 653 609

Semi-Processed High-Value Products 363 140 469 202 271 104

Processed High-Value Products 1,095 982 878 988 1,170 1,123

Total Exports $7,874 $ 4,559 $ 4,555 $ 5,846 $ 5,065 $4,308

1997 1998 1999 2000 2001 2002

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0
4

6,000

5,000

4,000

3,000

2,000

1,000

0

Figure 2—Agricultural Exports by Cooperatives, 1997-2002

Million dollars 

All HVPs

Raw HVPs

Processed HVPs

Semi-Processed HVPs

All Bulk

Figure 3—Changes in US and Cooperative Bulk Export Values 1997-2002

Percent

Co-op

U.S

1997-98 1998-99 1999-00 2000-01 2001-02

1997 1998 1999 2000 2001 2002

60.0

40.0

20.0

0.0

-20.0

-40.0

-60-0
Cooperative exports by and large show much wider

variations throughout the period than compared to

U.S. exports. For example, from 1997 to 1998, the value

of U.S. exports of bulk commodities fell 16.8 percent,

while the value of cooperatives' bulk exports fell more

than 54 percent.

Even sales for HVPs, which are typically not subject to the same kinds of volatile swings as bulk commodities, show significant departures from the patterns exhibited by U.S. sales of similar products. These

differences may or may not be market-driven. In some

categories, particularly bulk commodities in which a

high proportion of export sales is concentrated among

a relatively small number of exporters, the exit of one

or a few of those firms has a large impact.

Who Exports

Numbers

The known universe of U.S. cooperative

exporters is relatively small, anywhere from 80 to 125.

This survey encompasses those cooperatives known

historically through previous surveys to have been

consistent exporters as well as any newly identified

from other sources. Over the period, a number of

cooperative exporters reporting ranged from a low of

80 in 2002 to a high of 96 in 1998, with an average of

87. At least 75 percent of these cooperatives were consistently engaged in exporting from year to year.

Concentration

Although there are close to 100 U.S. cooperatives

active in exporting at any given time, just a handful of

firms are responsible for the largest proportion of

export sales. Over the period, the largest four

exporters accounted for between 75 percent (1997) to

56 percent (2002) of total cooperative exports (figure 5).

The largest eight exporters accounted for between 88.5

percent and 74 percent over the period. The result of

this high level of concentration among a few exporters

is that a market downturn or the exit of one of these

players has a significant impact on reporting export

results, often skewing the numbers away from usual

market trends or trade patterns.

This is magnified further as there are often only a

few cooperatives engaged in the export of a particular

product. Therefore, sharp changes in export values

over time must be viewed in this context. The low fig5

Figure 4—Changes in US and Cooperative HVP Export Values 1997-2002

Percent

U.S.

Co-op

1997-98 1998-99 1999-00 2000-01 2001-02

15.0

10.0

5.0

0.0

-50

-10.0

-15-0

-20.0
ures for the period-occurring in 2002—reflect this, as

this marked the exit of Farmland Industries from grain

exporting.

Size of Cooperative Exporters

Cooperative exporters are a diverse group in

terms of firm size (as measured by total sales), magnitude of export sales and products handled.

Cooperatives with total sales of as little as $1 million

registered exports-many on a consistent basis—as did

Fortune 500-sized firms. The level of export activity

varied greatly, from those with just a few thousand

dollars in export sales to a handful with billions of dollars in export sales. However, magnitude of exports in

and of itself is not necessarily an indicator of the

importance of exporting to a particular firm. A number

of cooperatives with seemingly small levels of export

sales are consistently in the market, having developed

and cultivated foreign customers, some of which constitute a sizeable or otherwise important part of their

overall business.

From a firm-level perspective, individual cooperative's reliance on exports can be measured by export

intensity—dividing export sales by total sales. Over

the period, the top four cooperative exporters registered export intensity of 30 to 70 percent, including the

next four largest that dropped the low end of that

range to 10 percent. By commodity category, among

cooperatives primarily engaged in bulk commodity

exports, cotton and rice registered the highest export

intensities, while tree nut and fresh non-citrus fruit

handlers relied most heavily on exports among HVPs

exporters.

Export Composition

Composition of cooperatives' exports in terms of

bulk commodities vs. HVPs is significant relative to

the composition of world and U.S. trade. Until about

20 years ago, world and U.S. agricultural trade was

comprised largely of bulk commodities-mainly grains,

oilseeds, and cotton. Gehlar and Coyle point out that

the grain trade once served as a proxy for agricultural

trade-an “indicator for measuring agricultural trade

growth.” 7 This is no longer the case. Globalization and

its impact on income and subsequent shifts in con6













Figure 5—Concentration of Cooperative Exports 1997-2002

Million dollars 

Largest 4 Exporters Largest 8 Exporters

7 Mark Gehlar and William Coyle, “Global Food Consumption and

Impacts on Trade Patterns,” Changing Structure of Global Food

Consumption and Trade, WRS-01-1, USDA/ERS.

1997 1998 1999 2000 2001 2002

100

80

60

40

20

0
sumption and production had a dramatic impact on

the composition of both world and U.S. agricultural

trade. Indeed, between 1997 and 2002, the proportions

of U.S. agricultural exports accounted for by bulk commodities and HVPs have flip-flopped, with HVPs now

dominant. In 2002, bulk commodities made up less

than 30 percent of world agricultural trade, while the

figure for the U.S. was around 37 percent. 8 Exports

from U.S. cooperatives, however, are dominated by

bulk commodities, which averaged 60 percent of total

cooperative exports over the period (Figure 6).

This may be reflective of the traditional cooperative role as originators or first handlers of basic commodities, but begs the question of the future of cooperatives in grain exporting an environment in which

some cooperative leaders favor less reliance on international markets by increasing domestic demand for

grains through renewable energy and livestock, while

others suggested that the traditional bulk commodity

business will soon cease to exist.9 This has increasing

played out-particularly in grains-with cooperative forays into meat packing operations and ethanol production; in the ceding of export functions to larger multinational trading firms through a variety of alliances

and joint ventures; and in the demise of major cooperative exporters like Farmland Industries.

Meanwhile, global trade in HVPs has become

increasingly important, accounting for approximately

40.4 percent of world trade and more than 60 percent

of U.S. exports. Because cooperative exports of the

same types of products remained relatively stable over

the period, the apparently narrowing gap between

bulk and HVP sales results from the dramatically

declining value of bulk commodity exports and subsequent shrinking total, rather than significant growth in

HVPs sales. Cooperatives' solid presence in some HVP

markets are indicative of its strong base in a number of

specialty products-tree nuts and meats, for example.

However, even as of the end of the period measured

and thereafter, changes in some cooperatives' structural and operating status will alter this dynamic.

Export Markets

The impacts of an array of factors on U.S. agricultural export patterns are mirrored in cooperative trade

patterns as well. Domestic and foreign agricultural and

trade policies, trade liberalization, exchange rates, and

the emergence of other countries as major competitors

(especially in bulk commodities) contributed to significant changes in trade patterns.

As shown in Figure 7, with the exception of Latin

America, cooperative exports to major markets fell off

sharply after 1997 in the wake of the Asian financial

7

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

'97

'98

'99

'00

'01

'02

Figure 6—Composition of U.S. and Cooperative Exports 1997-2002

8 Carol Whitton, “Processed Agricultural Exports Led Gains in U.S.

Agricultural Exports Between 1976 and 2002,” FAU-85-01, USDAERS, February 2004.

9 John R. Dunn, et al. Cooperatives in the 21st Century, Cooperative

Information Report 60, USDA/RBS, November 2002.

Co-op

U.S.

Bulk

HVPs
8

Figure 7—Cooperative Exports by Market 1997-2002

Million dollars 

3,000

2,500

2,000

1,500

1,000

500

0

Figure 8—Cooperative Exports of Bulk Commodities by Market 1997-2002

Million dollars 

1997 1998 1999 2000 2001 2002

1997 1998 1999 2000 2001 2002

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Asia

Latin America

Asia

Latin America

Europe

Europe

Canada

Canada
crisis. Cooperative exporters then struggled to recover,

with mixed results in still dominant Asia as well as in

Europe and Canada.

However, though values are far from 1997 levels,

Asian markets remain the dominant destination for

cooperative exports despite declining in share from

nearly 50 percent at the beginning of the period to

around 40 percent during the last 2 years.

Asian markets led in bulk commodities in 1997,

again in 2000 and 2002, but were overtaken by Latin

American markets in the intervening years (Figure 8).

The market for consumer goods in Asia and indeed,

the rest of the world, was relatively unaffected by the

Asian-led currency crisis of the late 1990s. Asia clearly

remains cooperatives' most important market for

HVPs, accounting for an average of more than 53 percent of all cooperative HVP exports over the period,

far outdistancing Europe, the next largest regional destination at 18 percent (Figure 9). Because the Asian

region consists of both highly developed economies as

well as developing markets, the pattern described here

in which Asia led in both bulk commodities and HVPs

is consistent with observations that developed countries import the most consumer-oriented products,

while developing countries import a higher proportion

of bulk commodities.10

Latin American markets-mainly on the strength

of Mexico-have emerged as key markets for cooperative exporters, accounting for as much as 42 percent of

all bulk exports by cooperatives and averaging almost

30 percent over the period. The sharp drop in bulk

sales to Latin America in 2002 is likely attributable

largely to the decline in grain sales after Farmland

Industries ceased operation.

HVPs are of increasing importance in Latin

American markets-especially Mexico-growing 130 percent over the period to challenge European markets

even as cooperative HVP sales to all markets remained

relatively unchanged.

In 1997, Europe was the second largest regional

market for all cooperative exports. From 1997 to 2002,

cooperative export values to Europe dropped by

almost half— from $1.4 billion to $711 million. Almost

80 percent of the value lost was attributable to declining bulk sales values. Bulk sales, which dominated

cooperative exports to Europe from 1997 through 2000,

were overtaken by HVPs in 2001 and 2002, with each

category comprising just under half of the total.

9

10 Changing Structure of Global Food Consumption and Trade

1,200

1,000

800

600

400

200

0

Figure 9—Cooperative HVPs Exports by Market 1997-2002

Million dollars 

1997 1998 1999 2000 2001 2002

Asia

Europe

Canada

Latin America
European markets for U.S. bulk commodities in general declined after the introduction of grain and oilseed

price supports in the 1970s and the European Union's

subsequent emergence as a net exporter of coarse

grains as well as a growing market for high-value consumer-oriented products.11 Europe remained the second largest market for HVPs, albeit just barely as Latin

American markets continue to gain on the strength of

rising consumer incomes.

Cooperative sales to Canada dropped sharply in

1998 before rising through 2000, and remained fairly

stable throughout the rest of the period, but only at 50

percent of the 1997 levels. Exports to Canada, dominated by bulk commodities in 1997, had leveled out to be

comprised almost equally of bulk and consumer-oriented products by 2002. By 2002, bulk commodities

had lost more than half of their value. HVP sales also

dropped off sharply in 1998, but recovered through the

period to almost 86 percent of 1997 levels.

As in Latin American markets, cooperative

exports to the Middle East actually increased from

$236 million in 1997 to $254 million in 1998 (gaining in

both bulk and HVP sales) before declining throughout

much of the rest of the time period. Bulk sales, which

dominated cooperative exports to this region, declined

to only 36 percent of 1997 levels, while modest sales of

HVPs actually gained ground by about 25 percent.

Sales to African markets, dominated by bulk

sales-much of it through aid programs, were down by

one-third over the period. Bulk commodities lost 62

percent of their value by 2002. Sales of HVPs in Africa

averaged only $7 million per year, most of it to South

Africa-the continent's only developed market.

Cooperative Shares of U.S. Exports

Cooperatives' contribution to U.S. agricultural

trade can be partially measured by shares-the percent

of all U.S. agricultural sales accounted for by cooperatives. This is only a partial measure in that it does not

include products originated by cooperatives and initially sold domestically, then exported by another firm,

either in its original form or as a processed product. As

shown in Figure 10, the cooperative share of all U.S.

exports reached its low point of 8.6 percent in 2002,

compared to its high of 13.8 percent in 1997. Similarly,

cooperative's bulk commodity share dropped from a

high of 23.2 percent in 1997 to just 12.6 percent in 2002.

HVP shares also declined over the entire periodthough more modestly than bulk—from their highest

point of 7.2 percent in 1997 to 5.7 percent in 2000,

before gaining slightly to just over 6 percent in the last

2 years of the period.

U.S. agriculture is twice as dependent on foreign

markets compared to the general economy.12 Measured

as exports divided by farm cash receipts, agriculture's

“export reliance” ranged from 22 to 26 percent during

the 1990s. Export reliance for agricultural cooperatives-measured as export sales reported divided by net

business of all cooperatives—ranged from 6 percent to

almost 10 percent during the period 1997 to 2002.

Again, because “export sales” as used in this survey

include only direct sales, products that may have been

originated by cooperatives and sold through or to an

export intermediary would not be reflected.

Product Category Detail

Bulk Commodities

Until 2002, wheat had historically been the

largest component in the cooperative bulk export sales

category, accounting for as much as 64 percent of bulk

exports in 2000, and averaging more than 40 percent

over the period. It also was the most volatile, owing

not only to price and currency issues throughout the

period, but also to changes in the cooperative grain

subsector, including divestiture of export facilities, the

formation of alliances with other firms that took over

direct exporting functions, and the failure of an important cooperative wheat trader. The value of cooperative wheat exports plummeted 84 percent over the

period (Figure 11). Its value in 1998 dropped 49 percent to $1.1 billion before sharply spiking up more

than 118 percent to almost $2.6 billion in 2000. Its precipitous fall to only $350 million in 2002-a drop of 74

percent from the previous year-likely reflects a permanent change in cooperative structure—the exit of one

of the largest cooperative exporters, Farmland

Industries.

Export sales of coarse grains (primarily corn),

usually a significant component of bulk sales, declined

66 percent over the entire period, but experienced an

even sharper drop-95 percent—from 1997 to 1998

before recovering to $561 million by 2002, just onethird of its 1997 value. The emergence of several significant competitors played a role here, as well as the

impact of biotechnology as some markets refused to

10

11 Whitton p.2.

12 Foreign Agricultural Service/Online: Importance of Trade for

Agriculture. June, 2002.

www.fas.usda.gov/info/factsheets/TPA/economy.html.
11

3,000

2,500

2,000

1,500

1,000

500 

0

Figure 11—Bulk Exports by Cooperatives 1997-2002

Million dollars 

25.0

20.0

15.0

10.0

5.0 

0.0

Figure 10—Cooperative Shares of U.S. Exports, by Commodity Group 1997-2000

Percent

1997 1998 1999 2000 2001 2002

1997 1998 1999 2000 2001 2002

Wheat

Cotton

Rice

Coarse grains Oilseeds

Bulk

HVPs Total
accept genetically modified grains. Together, wheat

and coarse grains account for 95 percent of the drop in

cooperatives' total bulk export sales.

Cotton exports, always a significant component

in the cooperative export mix, were down just 4 percent from 1997 to 2002. However, during the beginning of the period, they declined 56 percent through

1999 before climbing back to near-1997 levels in 2002.

Cotton was the highest valued cooperative bulk

export in 2002.

Sales of oilseeds-mainly soybeans—fell 20 percent over the entire period, though most of this decline

occurred in the early years and sales were fairly stable

throughout the remainder of the period.

Rice was one of the few cooperative exports that

actually gained from 1997 to 1998, increasing in value

45 percent from $237 million to $345 million. Export

values then fell about 30 percent in each of the next 2

years before rising to above-1997 levels in 2002, likely

on the strength of strong demand from Brazil and

other Latin American markets.

High-Value Products (HVPs)

Raw HVPs. Raw HVPs are those products with a

relatively high unit value due to product attributes

and/or the need for special handling, but which have

undergone little or no processing. For cooperatives,

these are mainly fresh fruit-citrus and deciduous—and

tree nuts. Raw HVP exports occurring in less significant amounts are combined in “Other“ and include

live animals, fresh vegetables, planting seeds, nursery

products, and cut flowers.

Overall, raw HVP export values declined by

more than one-third over the period. Falling fresh fruit

sales accounted for more than 70 percent of that

decline. As shown in Figure 12, until 2002, fresh fruit

was cooperatives' dominant raw HVP export, accounting for as much as 56 percent of that category. The

Asian financial crisis that led to changes in consumption patterns played a significant role here, as have

prohibitively high tariffs in some markets. In addition,

increased competition from China as well as changing

tastes in domestic markets forced the closure of a

number of cooperative apple packers in the Pacific

Northwest.

Cooperatives are a major presence in the tree nut

industry, which is highly dependent on exports that

annually account for over 40 percent of U.S. tree nut

supplies.13 Cooperative exports fell 38 percent

through 2000 in the face of low producer prices and

subsequent production and export declines, before

climbing back to near 1997 levels to overtake fresh

fruit exports.

Semi-Processed HVPs. This category includes

products that are partially processed for ingredient

markets or are otherwise not considered ready for

final consumers. These products include feeds, meals

(primarily soybean), vegetable oils (primarily soybean), and for cooperatives, other less significant

products such as hides and skins, sugars, sweeteners,

and beverage bases.

As seen in Figure 13, meals are clearly the most

volatile component of this category, although the reasons for this are not clear. Feed continue to be the

largest component through much of the period, but at

much lower levels after dropping off in 1998.

Vegetable oils had been a significant component before

1998, but now barely register.

Processed HVPs. Since the mid-1990s, meat products (beef, pork, and poultry) have overtaken

processed fruits and vegetables as the largest component (in terms of value) in the cooperative trade of

processed HVPs (Figure 14). Indeed, concentrated

efforts by a few large cooperatives greatly elevated the

cooperative presence in markets for meat, both internationally and domestically. Meats accounted for an

average of 54 percent of all cooperative exports of

processed HVPs over the period. Cooperatives experienced price-related declines in meat export values in

1998 and 1999, but saw significant growth from 1999

through 2001 on strong demand in key markets.

Processed fruits and vegetables declined almost as

precipitously. Export levels of these types of consumer-oriented products are often subject to fluctuations in exchange rates.

The increases evident in exports of dairy products as of 2001 are likely due to reporting changes, as

well as the advent of several dairy exporting coalitions, specializing primarily in the sale of nonfat dry

milk.

12

13 USDA/ERS, Briefing Room: Fruit and Tree Nuts.

www.ers.usda.gov/Briefing/FruitAndTreeNuts/trade.html
13

600

500

400

300

200

100

0

Figure 12—Cooperative Exports of Raw HVPs 1997-2002

Million dollars 

400

350

300

250

200

150

100

50

0

Figure 13—Cooperative Exports of Semi-Processed HVPs

Million dollars 

1997 1998 1999 2000 2001 2002

1997 1998 1999 2000 2001 2002

Other semiprocessed HVPs includes hides and skins, sugars, sweeteners, and beverage bases, and other semiprocessed HVPs not identified.

Other semiprocessed HVPs includes hides and skins, sugars, sweeteners, and beverage bases, and other semiprocessed HVPs not identified.

Fresh Fruit

Tree Nuts

Other

Meals

Feeds

Other

Vegetable Oils
Summary

The future of producer-owned cooperatives in

international markets is uncertain. As a group, cooperatives did not keep pace with the global trend toward

more reliance on exports of HVPs rather than more

volatile commodities. At the same time, that cooperative base in bulk commodity exports were eroded by

the emergence of formidable competitors in world

grain markets, as well as instability among some large

cooperative exporters. Individually, though some

cooperative exporters of HVPs continue to do well,

others struggle with foreign competition and the need

to access capital to boost marketing efforts. Increased

attrition as cooperatives fail or transition away from

the cooperative form of business will continue to erode

direct producer presence in international markets. The

data presented here point to two key questions: 1) At

what level can producer-owned bulk commodity handlers function in a global market? And 2) Can cooperatives—especially those in high-value markets—

evolve structurally and operationally in a way that

allows them to remain competitive, but still adequately represent producer interests? The answers to these

questions may be the key to whether the trends apparent in this data are transitory or whether they represent significant permanent change in the cooperative

presence in global markets.

References

Cobia, David, editor, Cooperatives in Agriculture, pp

Regents/Prentice Hall, 1989.

Gehlar, Mark and William Coyle, “Global Food

Consumption and Impacts on Trade Patterns,”

Changing Structure of Global Food Consumption and

Trade, WRS-01-1, USDA/ERS.

Whitton, Carol, “Processed Agricultural Exports Led

Gains in U.S. Agricultural Exports Between 1976

and 2002,” FAU-85-01, USDA-ERS, February

2004.

Dunn, John R. et al. Cooperatives in the 21st Century,

Cooperative Information Report 60, USDA/RBS,

November 2002.

USDA/ERS. “Agricultural Trade and the 1997-99

International Financial Crisis,” Agricultural

Outlook, Jan/Feb, 2000.

14

800

700

600

500

400

300

200

100

0

Figure 14—Cooperative Exports of Processed HVPs 1997-2002

Million dollars 

Other processed HVPs includes flours, pet foods, frozen bull semen, wine & beer, snack foods, and other processed HVPs not specifically

identified.

1997 1998 1999 2000 2001 2002

Meats

Processed Fruit

& Vegetables

Dairy

Other
USDA/ERS, Briefing Room: Fruit and Tree Nuts.

www.ers.usda.gov/Briefing/FruitAndTreeNuts/

trade.html

USDA/FAS/Online: Importance of Trade for

Agriculture. June, 2002.

www.fas.usda.gov/info/factsheets/TPA/economy.html.

USDA/RBS website:

www.rurdev.usda.gov/rbs/coops/data.htm.

“Number of Cooperatives & Memberships by

Major Business Activities," 2002.

www.sealdsweet.com

15
16

Table 2—Cooperative Exports by Destination, 1997-2001 ($ millions)

1997 1998 1999 2000 2001 2002

Africa $405.9 $373.5 $213.5 $602.8 $195.8 $149.9

Asia $3,907.9 1,444.6 $1,428.9 $2,459.3 $1,937.3 $1,728.9

Canada $684.7 $211.8 $249.1 $353.4 $333.5 $345.5

Europe $1,393.6 $942.7 $898.6 $581.2 $631.5 $711.6

Latin America $796.0 $956.0 $1361.2 $1404.6 $1,363.2 $939.1

Middle East $236.6 $254.2 $155.6 $84.9 $329.4 $100.2

Other* $449.3 $376.8 $248.9 $359.9 $274.7 $344.2

Total $7,877.4 $4,559.7 $4555.8 $5846.3 $5,066.6 $4,308.9

* Includes Oceania and unidentified destinations

Table 2a—Cooperative Exports of Bulk Commodities by Destination, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Africa $395.2 $345.1 $201.5 $592.4 $193.2 $147.1

Asia $2,817.6 $408.2 $549.5 $1,520.9 $884.7 $781.5

Canada $415.7 $111.4 $69.6 $96.2 $120.9 $181.1

Europe $964.7 $560.9 $456.4 $321.4 $296.6 $418.7

Latin America $610.6 $741.0 $1,103.7 $1,164.9 $1,101.2 $623.9

Middle East $197.5 $209.4 $119.4 $57.8 $286.7 $71.9

Unidentified $81.4 $233.8 $91.7 $243.4 $86.0 $247.9

Total $5,482.7 $2,609.8 $2,591.8 $3,997.0 $2,969.3 $2,472.1

Appendix A—Data Tables

Table 1—Agricultural Exports by Cooperatives, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Bulk Commodities $ 5,482 $2,609 $ 2,591 $ 3,997 $ 2,969 $2,472

HVPs 2,392 1,950 1,964 1,849 2,096 1,836

Total $7,874 $4,559 $4,555 $5,846 $5,065 $4,308
17

Table 2b—Cooperative Exports of HVPs by Destination, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Africa $5.8 $10.3 $1.4 $8.2 $11.3 $2.9

Asia $1,025.1 $1,000.9 $796.3 $908.6 $968.4 $947.4

Canada $185.5 $81.5 $127.9 $133.1 $156.7 $153.9

Europe $387.8 $343.9 $285.8 $228.4 $301.9 $292.9

Latin America $145.4 $171.9 $126.9 $205.1 $236.7 $315.3

Middle East $37.7 $51.3 $31.7 $45.4 $40.8 $28.2

Unidentified $208.2 $125.4 $97.7 $97.8 $103.4 $96.2

Total $1,989.7 $1,774.9 $1,466.3 $1,618.4 $1,807.9 $1,836.8

Table 3—Cooperative Shares of U.S. Agricultural Exports, 1997-2002

1997 1998 1999 2000 2001 2002

Bulk 23.2% 12.8% 15.4% 21.5% 15.7% 12.6%

HVPS 7.2% 6.5% 6.4% 5.7% 6.0% 6.2%

Total 13.8% 8.9% 9.7% 11.4% 9.4% 8.6%

Table 4—Bulk Commodity Exports by Cooperatives, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Wheat $2,213.9 $1,123.3 1,176.8 2,569.6 1,372.8 350.9

Coarse Grains $1,575.7 $86.2 227.5 297.4 372.6 530.1

Rice $237.9 $345.2 244.2 159.5 167.5 261.0

Oilseeds $633.1 $497.5 578.8 533.7 509.1 501.9

Cotton $778.6 $520.0 338.9 408.1 532.8 746.9

Other Bulk $43.5 $37.4 25.6 28.7 14.6 81.2

$5,482.7 $2,609.6 2,591.8 3,997.0 2,969.4 2,472.0

Table 5—Cooperative Exports of Raw HVPs, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Fresh Fruit 525.9 518.9 335.1 339.6 376.9 288.8

Tree Nuts 373.2 275.1 254.9 231.4 261.6 305.6

Other 32.8 33.6 26.5 26.7 15.3 14.8

Total 931.9 827.8 616.5 657.8 653.9 609.2
18

Table 7—Cooperative Exports of Processed HVPs, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Dairy Products 57.5 40.6 44.9 47.8 170.2 143.2

Proc. Fruit & 

Vegetable 459.3 484.4 366.8 332.1 286.6 274.4

Meats 494.1 444.1 450.3 598.5 705.2 700.8

Other 84.6 12.9 16.3 10.1 8.8 4.9

Total 1,095.6 982.0 878.4 988.5 1,170.8 1,123.3

Table 6—Cooperative Exports of Semi-Processed HVPs, 1997-2002 ($ millions)

1997 1998 1999 2000 2001 2002

Feeds 184.0 36.3 92.7 47.2 67.6 71.7

Soybean meal 20.6 28.3 367.4 129.3 175.4 14.7

Vegetable oils 145.5 3.8 3.1 6.9 3.4 2.7

Other 13.8 71.8 5.9 19.6 25.2 15.2

Total 363.9 140.2 469.1 202.9 271.6 104.3
U.S. Department of Agriculture

Rural Business–Cooperative Service

Stop 3250

Washington, D.C. 20250-3250

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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,

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to further development.

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rural residents develop cooperatives to obtain supplies and

services at lower cost and to get better prices for products they

sell; (2) advises rural residents on developing existing

resources through cooperative action to enhance rural living;

(3) helps cooperatives improve services and operating

efficiency; (4) informs members, directors, employees, and the

public on how cooperatives work and benefit their members

and their communities; and (5) encourages international

cooperative programs. RBS also publishes research and

educational materials and issues Rural Cooperatives magazine.

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