Research Report 233

Rural Business-Cooperative Programs

United States

Department of

Agriculture

Rural Development

Financial Profile of 

Dairy Cooperatives, 

2012

Financial Profile of Dairy Cooperatives, 2012 i

ABSTRACT

This study profiles the financial status and performance for U.S. dairy cooperatives in 2012. Consolidated financial statements for 89 dairy cooperatives 

are presented. Dairy cooperatives were categorized 

into groups based on their primary function and according to size (volume of milk handled). Balance 

sheets and operating statements were presented on a 

per-hundredweight (cwt) of milk basis by operating 

type and by size category. Dairy cooperatives employed $10.90 per cwt in assets to market member 

milk. Net margins before tax were 19 cents per cwt 

of total milk handled, which represented an 8.4-percent return on member equity.

Key Words: Cooperatives, financial statements, 

financial structure, milk, dairy.

Financial Profile of Dairy Cooperatives, 2012

Carolyn Liebrand 

USDA Rural Development

Rural Business-Cooperative Service

RBS Research Report 233

November 2014
ii Financial Profile of Dairy Cooperatives, 2012

PREFACE

Information for this report resulted from a 2013 

survey of all U.S. dairy cooperatives that gathered 

financial and marketing data for cooperatives’ fiscal 

years ending in calendar 2012. Of the 132 dairy 

cooperatives operating in 2012, 89 provided sufficient financial information that could be used in this 

study. However, those cooperatives represent 80.1 

percent of the net milk volume handled by all dairy 

cooperatives and an estimated 93 percent of the assets employed by all cooperatives that handle milk 

from dairy cows. 

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 adding an equal 

amount as cost of goods sold and, therefore, does 

not affect the total 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.

This report presents consolidated balance sheets 

and operating statements for U.S. dairy cooperatives. Dairy cooperatives vary in size and functions 

performed in marketing members’ milk. Thus, 

financial profiles according to functional type and 

size (based on net volume of milk handled) are also 

presented. 

The consolidated financial statements are expressed on a per-cwt-of-milk basis. This makes it 

easier for an individual dairy cooperative to compare its financial structure with the profiled cooperatives and to facilitate comparisons between cooperatives of different size and scope. Relationships 

between various items in the balance sheet and 

operating statement are also used to analyze comparative dairy cooperative performance.

.
Financial Profile of Dairy Cooperatives, 2012 iii

ABSTRACT i

PREFACE ii

HIGHLIGHTS v

Introduction 1

Functional types of dairy cooperatives 1

Financial profile 2

Size categories 3

Financial statements 4

Balance sheet 4

Operating statement 7

Ratios 9

Discussion 11

Comparison with 2007 13

Summary 13

References 13

List of Tables

Table 1—Comparison of cooperatives in the financial profile study and all U.S. dairy cooperatives, 2012 2

Table 2—Dairy cooperatives in the financial profile study compared with U.S. dairy cooperatives, by type, 2012 2

Table 3—Cooperatives in the study compared with all U.S. dairy cooperatives, by size, 2012 3

Table 4—Dairy cooperative numbers by type and by size, financial 

profile cooperatives, and U.S. dairy cooperatives, 2012 4

Table 5—Consolidated balance sheet per cwt of member milk, overall 

and by type of dairy cooperative, financial profile cooperatives, 2012 4

Table 6—Forms of equity used by profiled dairy cooperatives, 2012 5

Table 7—Consolidated balance sheet per cwt of member milk, by size 

of profiled dairy cooperative, 2012 6

Table 8—Consolidated balance sheet per cwt of member milk, 

by type and size of profiled dairy cooperative, 2012 7

Table 9—Profiled dairy cooperatives’ consolidated operating statement, 

per cwt of total milk handled, overall and by type, 2012 8

Table 10—Profiled dairy cooperatives’ consolidated operating statement 

per cwt of total milk handled, by size of cooperative, 2012 8

Table 11—Profiled dairy cooperatives’ consolidated operating statement 

per cwt of total milk handled, by type and size, 2012 9

Table 12—Financial ratios, overall and by type and by size of profiled dairy cooperative, 2012 10

Table 13—Comparison of profiled dairy cooperatives’ operating statements 

per cwt of total milk handled, by share of total sales and income from supply and other sales, 2012 11

Table 14—Comparison of balance sheets of profiled dairy cooperatives 

per cwt of member milk, by share of total sales and income from supply and other sales, 2012 11

Table 15—Comparison of financial profile dairy cooperatives 

per cwt, overall and by type of cooperatives, 2007 and 2012 12

 (continued next page)

CONTENTS
iv Financial Profile of Dairy Cooperatives, 2012

Appendix tables

Appendix table 1—Consolidated financial statements, overall and by type of profiled dairy cooperative, 2012 14

Appendix table 2—Consolidated financial statements, by size of profiled dairy cooperative, 2012 15

Appendix table 3—Common-sized balance sheet, by type of profiled dairy cooperative, 2012 16

Appendix table 4—Common-sized balance sheet, by size of profiled dairy cooperative, 2012 16

Appendix table 5—Common-sized operating statement, by type of profiled dairy cooperative, 2012 17

Appendix table 6—Common-sized operating statement, by size of profiled dairy cooperative, 2012 17

CONTENTS (continued)
Financial Profile of Dairy Cooperatives, 2012 v

HIGHLIGHTS

More than 80 percent of the milk handled by U.S. 

dairy cooperatives was accounted for by the 89 

cooperatives for which USDA collected complete 

financial information and are included in this report. 

These co-ops were categorized according to the type 

of operations: bargaining-only, niche-marketing, 

and diversified. 

The cooperatives were also categorized according to the volume of milk they handled into small-, 

medium-, and large-size groups.

Overall, dairy cooperatives had $10.90 of assets 

per hundredweight (cwt) to market their members’ 

milk in 2012. Current assets came to $6.74 per cwt 

of member milk, while property, plant, and equipment were $3.42 per cwt. Total liabilities were 

$8.12 per cwt, of which $5.38 (66.3 percent) were 

current liabilities. Member equity was $2.78 per cwt 

of milk. (Dairy cooperatives typically pay members 

for their milk twice a month. A large proportion of 

the current assets and current liabilities are related 

to such periodic cash payments to members.)

Bargaining-only cooperatives used the least assets to market a cwt of milk ($2.31), while diversified cooperatives used the most ($12.15). Likewise, 

bargaining-only cooperatives had the fewest liabilities per cwt ($1.49). Niche-marketing and diversified cooperatives had more total liabilities per cwt 

($6.29 and $9.08, respectively).

Diversified cooperative members had the highest equity per cwt of member milk ($3.07)—more 

than three times the 82 cents of equity per cwt of 

bargaining-only cooperatives. Niche-marketing 

cooperatives had twice the member equity per cwt 

as bargaining-only cooperatives.

Total assets per cwt of member milk were highest 

for the large cooperatives ($11.52) and lowest for 

the medium-size group ($4.07). Member equity per 

cwt was also lowest for the medium-sized cooperatives ($1.44) but highest for the small group ($4.06). 

Most of the cooperatives (95.5 percent) had some 

amount of member equity in 2012. Allocated equity made up the bulk of member equity in terms of 

value—83.8 percent of total equity—while retained 

earnings/unallocated equity represented just 7.6 

percent in 2012. Preferred stock amounted to 7.0 

percent of total equity while non-controlling minority interests and common stock represented a slight 

amount of the total value of members’ equity in the 

cooperative.

Milk and dairy product sales was the largest 

source of income at $23.69 per cwt of milk handled 

in 2012. Supply and other sales was the next largest 

item at $6.68 per cwt. Total revenue was $30.56 per 

cwt, while net margins before tax came to 19 cents 

per cwt of total milk handled by the 89 cooperatives.

Niche-marketing cooperatives generated the 

largest milk and dairy product sales per cwt of 

total milk handled ($32.29), while bargaining-only 

cooperatives generated the least ($20.42). Diversified cooperatives’ supply sales ($7.33 per cwt) were 

considerably larger than those of the other two types 

($1.08 for bargaining-only and 12 cents for niche 

marketing cooperatives). Still, niche-marketing cooperatives had the largest total revenue per cwt for 

2012, $32.69.

Diversified cooperatives’ net margins-before-tax 

were the highest of the three types of cooperatives 

(20 cents per cwt). Bargaining-only cooperatives 

had 7 cents in net margins while niche-marketing 

cooperatives had less than 1 cent per cwt in net 

margins.

Small cooperatives reported the highest total 

revenue—$37.93 per cwt of milk handled—and 

also the highest expenses: $36.26 per cwt. In contrast, medium-size cooperatives reported the lowest 

total sales and income, $24.64 per cwt, and lowest 

expenses, $24.45 per cwt. However, net margins for 

the medium and large cooperatives were within 1 

cent of each other, 19 and 18 cents per cwt, respectively—both well below those of the small cooperatives: $1.67 per cwt. 

The small cooperative group included a number 

of bargaining-only cooperatives that had substantial 

supply and other operations. These non-dairy operations impacted the structure of these cooperatives’ 

financial statements. For some of these, supply and 

other sales were greater than milk and dairy product 

sales.

Return on equity (before taxes) was 8.4 percent 

for dairy cooperatives in 2012. The rate of return on 

equity ranged from 8.7 percent for bargaining-only 
vi Financial Profile of Dairy Cooperatives, 2012

cooperatives and 8.4 percent for diversified cooperatives to 0.2 percent for niche-marketing cooperatives. 

Return on assets employed in marketing milk 

averaged 2.1 percent overall. Niche-marketing cooperatives had the lowest return-to-total-assets compared to bargaining-only or diversified cooperatives. 

There was somewhat greater variation in returns 

among different size groups than among different 

types. Small cooperatives achieved the highest level 

of return both to equity and to assets. The subset of 

small cooperatives that earned a majority of their 

revenue from nondairy items boosted these measures of return. 
Financial Profile of Dairy Cooperatives, 2012 1

Financial Profile of Dairy Cooperatives, 2012

Carolyn Liebrand 

Agricultural Economist

Introduction

Farmer cooperative statistics are collected annually 

by USDA Rural Development to provide information on the status and growth of cooperatives. In 

August 2012 through June 2013, dairy cooperatives 

were surveyed by mail for details about their marketing operations during fiscal 2012. This data was 

used to develop financial statistics specific to dairy 

cooperatives for this report. Analysis of the 2012 

marketing operations of all U.S. dairy marketing 

cooperatives is presented in Research Report 230 

(Ling). 

Functional types of dairy cooperatives

Dairy cooperatives perform a variety of functions for their members and have taken different 

approaches to ensure there is a market for their 

members’ milk. Each cooperative’s operations are 

unique, due to the characteristics of its memberowners and the marketing environment in which 

it operates. That said, there are similarities among 

dairy cooperative operations. All dairy cooperatives 

market milk at the first-handler level, while some 

also own and operate plants to make at least a portion of their members’ milk into various products.

 Dairy cooperatives may be classified into three 

groups by function: bargaining-only, niche-marketing, and diversified dairy cooperatives. Those 

cooperatives that only operate at the first-handler 

level are known as “bargaining-only” cooperatives. 

They assist members in the marketplace by negotiating prices, facilitating arrangements between milk 

buyer and seller, ensuring that milk weights and 

tests are accurate, and other milk marketing services. Most of these cooperatives do not own plants. 

However, some operate milk shipping and receiving 

stations. A few operate plants for processing small 

volumes of raw milk for balancing purposes or to 

facilitate shipping by removing some of the water 

from raw milk via ultra-filtration or reverse osmosis.

Of the 132 cooperatives handling milk from cows 

in 2012 (RR 230), there were 93 bargaining-only 

cooperatives, of these 41.9 percent were small, 

handling less than 50 million pounds of milk; 51.6 

percent were medium-sized, handling 50 million 

to 1 billion pounds of milk; and 6.5 percent were 

large, handling more than 1 billion pounds of milk. 

Bargaining-only cooperatives are most numerous in 

the Nation’s Upper Midwestern and Northeastern 

States, but 32 States had dairy farmers who were 

members of a bargaining-only cooperative. 

Dairy cooperatives that operate plants to further 

process their members’ milk have been divided into 

two groups: “niche-marketing” and “diversified.”

Cooperatives that typically use most or all of 

their members’ milk to make specialty dairy products are called niche-marketing cooperatives. Included in this category are small- and medium-sized 

cooperatives that make artisan or branded cheese. 

Some of these also distinguish their products by the 

way the milk was produced. For example, they may 

require organic production methods or only accept 

milk from grass-fed cows. Some of these cooperatives may contract with others to have the niche 

products made from their milk. 

In 2012, there were just 12 niche-marketing cooperatives. Three-fourths of these cooperatives were 

small, while the rest were medium-sized. All but 

one was headquartered in Wisconsin, but members 

of niche-marketing cooperatives were reported in 

four States.

Diversified cooperatives own and operate plants 

to make a variety of commodity and/or differentiated products. They also sell a portion of their 
2 Financial Profile of Dairy Cooperatives, 2012

members’ milk as bulk raw milk. They typically 

make some hard products such as butter, dried dairy 

products, and/or cheese. These co-ops may also 

make packaged fluid milk and “soft” products, like 

sour cream, dips, yogurt, cottage cheese, and ice 

cream. Rather than owning and operating production facilities, these cooperative may contract with 

milk plants for the manufacture and processing of 

products, but this is 

rare. 

Two of the cooperatives in this 

group are focused on 

the fluid beverage 

market. They were 

formerly classified 

as “fluid-processing” 

cooperatives. However, these cooperatives fit in the 

diversified category 

because their operations also include 

making a variety of 

other products, as 

well as selling bulk 

raw whole milk. The 

fluid category has 

been discontinued 

since there are too 

few cooperatives 

with operations exclusively focused on 

packaging fluid milk 

to warrant a separate 

category.

None of the 27 diversified cooperatives 

were small—22.2 

percent were medium-sized and 77.8 

percent were large. 

Some dairy farmers in each of the 48 

contiguous States are 

members of a diversified cooperative. 

Financial profile

Of the 132 dairy cooperatives surveyed in 2013, 89 

provided complete financial data for fiscal 2012, 

which is presented in this report. Over two-thirds 

of the dairy cooperatives in the United States (67.4 

percent) are represented by the cooperatives in this 

study (table 1). Co-ops included in this financial 

profile handled 80.1 percent of the total co-op milk 

	 Profile cooperatives

Financial profile	 U.S. dairy	 as a percent of all

Item cooperatives	 cooperatives	 U.S. cooperatives

- - - Number - - - - Percent - 

Cooperatives1 89 132 67.4

- - - Million dollars - - - - Percent -

Milk and dairy sales1 37,913 41,753 88.7

Assets1 13,940 15,036 92.7

 - - - Million pounds - - - - Percent -

Total net milk volume2 134,384 167,673 80.1

1 Estimated for U.S. dairy cooperatives. 

2 Total milk handled by cooperatives less inter-cooperative transfers.

Table 1: Comparison of cooperatives in the financial profile study 

and all U.S. dairy cooperatives, 2012

Financial profile	 U.S. dairy	 Share of U.S.

Primary function 	 cooperatives	 cooperatives	 represented

Number of Cooperatives

 - - - Number - - - - Percent - 

Bargaining-only 60 93 64.5

Niche-marketing 4 12 33.3

Diversified	 25	 27	 92.6

Net Milk Volume1

 - - - Million pounds - - - - Percent -

Bargaining-only 16,265 30,625 53.1

Niche-marketing 261 469 55.7

Diversified	 117,859	 136,580	 86.3

Total assets2

- - - Million dollars - - - - Percent -

Bargaining-only 375 438 85.6

Niche-marketing 21 28 75.4

Diversified	 13,544	 14,570	 93.0

1 Total milk handled by cooperatives less inter-cooperative transfers.

2 Estimated for U.S. dairy cooperatives.

Table 2: Cooperatives in the study compared with all U.S. dairy 

cooperatives, by type, 2012
Financial Profile of Dairy Cooperatives, 2012 3

volume (net of intercooperative transfers). 

They employed an 

estimated 92.7 percent 

of the total assets of 

all cooperatives that 

handled milk and represented 88.7 percent 

of the milk and dairy 

sales of all cooperatives in 2012.

Two of the three operating types of dairy 

co-ops are well-represented in this study 

(table 2). Sufficient 

data was obtained from 

a majority (64.5 percent) of the bargainingonly dairy cooperatives 

in the United States. 

The 60 bargainingonly cooperatives that 

provided financial data 

for this study represent 53.1 percent of the milk handled by that group. 

However, the reporting cooperatives accounted for 

about 85.6 percent of all bargaining-only cooperative assets.

The niche-marketing cooperatives were somewhat under-represented. Just one-third (33.3 percent) of niche-marketing cooperatives provided 

detailed financial data. However, these four reporting cooperatives handled 55.7 percent of the 

niche-marketing cooperatives’ milk. Further, these 

cooperatives represent an estimated 75.4 percent of 

the assets of niche-marketing cooperatives in 2012. 

Nevertheless, one should use caution in applying 

the results to all cooperatives of this type because of 

the few niche-marketing cooperatives represented.

Most of the diversified cooperatives (92.6 percent) provided financial details. They also represent 

92.7 percent of all the assets used by this type of 

cooperative and 86.3 percent of the milk handled by 

diversified cooperatives in 2012.

Appendix table 1 shows the 2012 consolidated 

financial statements for all 89 dairy cooperatives, by 

type of cooperative.The financial performance of all 

profiled dairy cooperatives reflects the dominance 

of diversified cooperatives because, as a group, they 

represent most of the assets and total revenues.

Size Categories

Dairy cooperatives were also categorized into three 

size groups according to the volume of milk handled: small (less than 50 million pounds of milk), 

medium (50 million to 1 billion pounds) and large 

(more than 1 billion pounds). Most of the large 

cooperatives (81.5 percent) are represented in this 

study. A majority of the medium-sized cooperatives 

(70.2 percent) and small cooperatives (56.3 percent) 

are also represented in this study (table 3). A similar 

proportion of the net milk volume handled by cooperatives is accounted for by each of the size groups. 

Most of the assets of cooperatives in each size category are represented by the profiled cooperatives.

Most of the small- and medium-sized cooperatives function as bargaining-only cooperatives. 

However, some cooperatives of each of the three 

operating types are medium-sized. In contrast, there 

were no small diversified cooperatives. The large 

Financial profile	 U.S. dairy	 Share of U.S.

Primary function 	 cooperatives	 cooperatives	 represented

Number of Cooperatives

- - - Number - - - - Percent - 

Small1 27 48 56.3

Medium2 40 57 70.2

Large3 22 27 81.5

Net Milk Volume

- - - Million pounds - - - - Percent -

Small 531 1,008 52.7

Medium 10,482 14,681 71.4

Large 123,371 151,984 81.2 

Total assets4

- - - Million dollars - - - - Percent -

Small 44 54 80.2

Medium 428 484 88.4

Large 13,469 14,498 92.9

1

Cooperatives that handled less than 50 million pounds of milk.

2

Cooperatives that handled 50 to 1 billion pounds of milk.

3

Cooperatives that handled 1 billion pounds of milk or more.

4

Estimated for U.S. dairy cooperatives.

Table 3: Cooperatives in the study compared with all U.S. dairy 

cooperatives, by size, 2012
4 Financial Profile of Dairy Cooperatives, 2012

cooperatives were 

mostly diversified 

cooperatives, while 

some were bargaining-only cooperatives 

and none were nichemarketing cooperatives. The proportions 

of each operating 

type by size groups 

are similar to those 

for dairy cooperatives 

overall (table 4). 

See appendix table 

2 for the consolidated 

financial statements 

by size of dairy cooperative.

Financial 

Statements

The consolidated 

financial statements 

are expressed in 

terms of dollars per 

hundredweight (cwt) 

of milk. Commonsized financial statements–expressed as a 

percent of total assets 

and a percent of total 

revenue–can be found 

in appendix tables 3 

through 6.

Balance Sheet

Balance sheet information is presented 

on a per-cwt-ofmember-milk basis 

to show the capital 

required to market 

members’ milk (table 

5). Overall, the profiled dairy cooperatives had $10.90 in 

assets for each cwt of 

Type of cooperative

Size category	 Bargaining-only	 Niche-marketing	 Diversified	 All

Percent of all cooperatives1

Financial profile cooperatives

Small 28.1 2.2 - 30.3

Medium 36.0 2.2 6.7 44.9

Large 3.4 - 21.3 24.7

All 67.4 4.5 28.1 100.0

U.S. dairy cooperatives

Small 29.5 6.8 - 36.4

Medium 36.4 2.3 4.5 43.2

Large 4.5 - 15.9 20.5

70.5 9.1 20.5 100.0

Note: Totals may not add due to rounding

1

89 total financial profile cooperatives; 132 U.S. dairy cooperatives

Table 4: Dairy cooperative numbers by type and by size, financial

profile cooperatives and U.S. dairy cooperatives, 2012

Type of cooperative

	 Bargaining-	 NicheSize category	 All	 only	 marketing	 Diversified	

Dollars per cwt of member milk

Current assets 6.74 1.24 3.94 7.55

Net PP&E1 and other assets 3.42 0.80 3.59 3.80

Investments in other co-ops 0.74 0.27 0.51 0.81

 Total assets 10.90 2.31 8.04 12.15

Current liabilities 5.38 1.06 5.22 6.01

Long-term liabilities 2.74 0.43 1.07 3.07

 Total liabilities 8.12 1.49 6.29 9.08

Common stock 0.00 0.00 0.00 0.00

Preferred stock 0.19 0.11 0.00 0.21

Allocated equity 2.33 0.56 1.51 2.59

Unallocated equity 0.21 0.14 0.24 0.22

Minority interests 0.04 - - 0.05

 Total equity 2.78 0.82 1.75 3.07

 Total liabilities and equity 10.90 2.31 8.04 12.15

Member milk (million lbs.) 127,942 16,232 261 111,449

Note: Totals may not add due to rounding; cwt = hundredweight. 1 Property, plant and equipment.

Table 5: Consolidated balance sheet per cwt of member milk,

overall and by type of dairy cooperative, financial profile

cooperatives, 2012
Financial Profile of Dairy Cooperatives, 2012 5

milk members sold through the co-op in 2012. 

Dairy cooperative assets were comprised of $6.74 

in current assets, $3.42 in fixed assets (net of investments in other cooperatives) and 74 cents per cwt of 

member milk in investments in other cooperatives 

in 2012. Current assets represented 61.9 percent of 

dairy cooperatives’ total assets.

On the other side of the balance sheet, total liabilities were $8.12 per cwt in 2012. Two-thirds of 

the liabilities were current liabilities, or $5.38 per 

cwt. This may include pending payments to members for their delivered milk. 

A unique characteristic of a dairy cooperative’s 

balance sheet can be seen its current assets and 

current liabilities. Dairy cooperatives typically pay 

members for their milk twice a month. A large proportion of the current assets and current liabilities 

are related to such periodic cash payments to members.

Total member equity amounted to about one-half 

of the current liabilities--$2.78 for each cwt of milk 

marketed through cooperatives. Member equity supplied 25.5 percent of the total assets employed by 

the cooperatives to market their milk.

Table 6 shows different forms of equity reported 

by the profiled dairy cooperatives. Only 4.5 percent 

of the cooperatives did not have member equity. 

Those not reporting retained earnings or unallocated 

member equity were typically bargaining-only cooperatives that did not have any assets. 

Most of the cooperatives (85.4 percent) had allocated equity, while 67.4 percent reported retained 

earnings or unallocated equity in 2012. However, 

some co-ops may allocate the unallocated equity at 

a later date. Moreover, as part of total equity, the 

unallocated equity represented just 7.6 percent for 

dairy cooperatives overall. A small number of cooperatives (6.7 percent) had non-controlling minority 

interests. This type of equity was only reported by 

large, diversified cooperatives.

Common stock was issued by 39.3 percent of 

the cooperatives. This stock typically carries only a 

token value, being used primarily to signify membership. It thus represents a negligible proportion of 

total equity. 

Preferred stock was issued by 13.5 percent of 

the cooperatives, amounting to 7.0 percent of total 

cooperative equity value in 2012. 

(Note: some cooperatives may not have identified 

the different classes of equity. For example, common stock is generally of little monetary value, and 

some cooperatives may not have reported it separately.) 

Balance Sheet by Type

The structure of balance sheets varied according to 

the operational type of dairy cooperative. Among 

the three groups of cooperatives, bargaining-only 

cooperatives have relatively low assets because 

they, for the most part, do not own milk-handling 

facilities. Thus, bargaining-only cooperatives required the least assets to market milk, $2.31 per cwt 

of member milk. 

 Niche-marketing cooperatives, on the other hand, 

have relatively high assets, $8.04 per cwt. However, 

diversified cooperatives had the most assets per cwt: 

$12.15 per cwt of member milk. 

Current assets per cwt of member milk likewise 

showed a wide range between operating types—

ranging from just $1.24 for bargaining-only cooperatives to $7.55 for diversified cooperatives. For 

niche-marketing cooperatives, current assets represented 49.0 percent of total assets, unlike the other 

two types, where a majority of assets were current 

assets (53.6 percent for bargaining-only and 62.1 

percent for diversified cooperatives).

Percent of	 Percent of

cooperatives	 total equity

Item	 using1 value

Allocated equity 85.4 83.8

Retained earnings/

 Unallocated equity 67.4 7.6

Non-controlling minority 

 interests 6.7 1.6

Common stock 39.3 0.0

Preferred stock 13.5 7.0

No member equity 4.5 - 

100.0

1 Will not add to 100 percent because many cooperatives had 

more than one type of equity.

Table 6: Forms of equity used by 

profiled dairy cooperatives, 

2012
6 Financial Profile of Dairy Cooperatives, 2012

Property, plant, and equipment and other assets 

totaled 80 cents per cwt for bargaining-only cooperatives, while niche and diversified cooperatives used 

$3.59 and $3.80, respectively. Investment in other 

cooperatives ranged from 27 cents (bargaining-only 

cooperatives) to 81 cents per cwt (diversified cooperatives). Investment in other cooperatives may 

include investment in a cooperative bank as part of 

a loan requirement.

Diversified cooperatives also had the highest total 

liabilities per cwt, $9.08, followed by niche-marketing cooperatives—$6.29. Bargaining-only cooperatives had relatively low liabilities, $1.49 per cwt. 

Current liabilities were also lowest for bargaining-only cooperatives, $1.06 per cwt. Niche-marketing cooperatives had $5.22 in current liabilities per 

cwt, with diversified cooperatives’ a bit higher at 

$6.01 per cwt. 

Reflecting the nature of their operations, bargaining-only cooperatives had few long-term liabilities, 

43 cents per cwt, while niche-marketing and diversified cooperatives had higher levels of long-term 

liabilities: $1.07 and $3.07 per cwt, respectively. 

Members of diversified cooperatives had the 

highest investment in their cooperatives on a percwt basis. Members had $3.07 of equity for each 

cwt of milk they marketed through their diversified 

cooperatives. In contrast, 

bargaining-only cooperative members had just 82 

cents per cwt in member 

equity. Niche-marketing 

cooperatives’ member 

equity was $1.75 per cwt 

in 2012. 

Comparing total member equity to total assets, 

equity amounted to 35.4 

percent of total assets for 

bargaining-only cooperatives but was just 21.9 

percent of niche-marketing cooperatives’ total 

assets and 25.3 percent 

of diversified cooperatives’ total assets. 

Balance Sheet by Size

Total assets employed per cwt of member milk 

ranged from $4.07 for medium-size cooperatives to 

$11.52 for the large cooperatives, and small cooperatives averaged $8.20 per cwt (table 7). Total 

liabilities followed the same pattern, ranging from 

$2.63 for medium cooperatives to $8.63 for the 

large cooperatives, where small cooperatives had 

$4.14 in total liabilities. 

In contrast, small cooperatives had the largest 

total member equity, $4.06 per cwt. Further, comparing total member equity to total assets, small 

cooperatives’ member equity was 49.5 percent of 

total assets. Equity expressed as a percent of total 

assets fell as size group increased—35.5 percent 

for medium-sized cooperatives and 25.1 percent 

for large cooperatives. Medium-sized cooperatives 

had the least member equity, $1.44 per cwt, versus 

$2.89 per cwt for large cooperatives. 

The larger the size group, the larger the proportion of cooperatives that reported retained earnings 

or unallocated equity and that had preferred stock.

Table 8 shows the balance sheet by size of 

bargaining-only and diversified cooperatives. 

(There were not enough niche-marketing cooperatives reporting to show their statements by size.) 

The small, bargaining-only cooperatives employed 

Size Group

Item	 Small	 Medium	 Large

------------Dollars per cwt of member milk-----------

Current assets 5.29 2.70 7.11

Net PP&E1 and other assets 1.01 1.02 3.64

Investments in other co-ops 1.89 0.35 0.77

 Total assets 8.20 4.07 11.52

Current liabilities 3.65 2.35 5.66

Long-term liabilities 0.49 0.28 2.97

 Total liabilities 4.14 2.63 8.63

 Total equity 4.06 1.44 2.89

 Total liabilities and equity 8.20 4.07 11.52

Note: Totals may not add due to rounding; cwt = hundredweight. 1

 Property, plant and equipment.

Table 7: Consolidated balance sheet per cwt of member milk, 

by size of profiled dairy cooperative, 2012
Financial Profile of Dairy Cooperatives, 2012 7

more assets than did 

the larger bargainingonly cooperatives. 

Conversely, the large 

diversified cooperatives had greater assets per cwt than the 

medium-sized diversified cooperatives. 

The same pattern held true for 

the member equity 

invested in the cooperative per cwt of 

milk. A segment of 

the cooperatives had 

significant supply 

operations which 

impact their balance 

sheets, as is particularly evident with the 

small, bargainingonly cooperatives.

Operating Statement

Operating statements 

are presented on a basis of per-cwt of total milk handled. This shows the 

revenues, expenses and margins generated by the 

total volume of milk going through cooperatives. 

Some of this milk may have also been handled by 

other cooperatives.

Dairy cooperatives included in this study generated $23.69 in milk and dairy product sales per cwt 

of milk handled in 2012 (table 9, next page). Included in this figure were 91 cents per cwt in export 

sales. Supply and other sales was the next largest 

item, $6.68 per cwt. Total revenue was $30.56 per 

cwt of milk handled. After expenses of $30.38 per 

cwt, dairy cooperatives realized net margins before 

taxes of 19 cents per cwt. These margins represent 

0.6 percent of total revenue.

Operating Statement by Type

Milk and dairy product sales per cwt of milk handled were lowest for bargaining-only cooperatives, 

$20.42. These sales were highest for niche-marketing cooperatives, $32.29 per cwt. This may reflect 

Bargaining-only	 Diversified 

Item	 Small	 Medium	 Large	 Medium	 Large	

Dollars per cwt of member milk

Current assets 5.54 1.68 0.66 4.87 7.63

Net PP&E1 and other assets 0.97 0.35 1.16 2.29 3.84

Investments in other co-ops 1.93 0.46 0.03 0.15 0.83

 Total assets 8.44 2.48 1.85 7.31 12.30

Current liabilities 3.90 1.40 0.64 4.19 6.06

Long-term liabilities 0.34 0.13 0.68 0.57 3.15

 Total liabilities 4.24 1.53 1.32 4.76 9.21

Common stock 0.01 0.00 0.00 0.00 0.00

Preferred stock 0.00 0.00 0.21 - 0.21

Allocated equity 3.32 0.68 0.32 1.88 2.61

Unallocated equity 0.86 0.27 0.00 0.67 0.21

Minority interests - - - - 0.05

 Total equity 4.20 0.95 0.53 2.55 3.08

 Total liabilities and equity 8.44 2.48 1.85 7.31 12.30

Member milk (million pounds) 455 7,053 8,724 3,244 108,205

Note: Totals may not add due to rounding; cwt = hundredweight. 1 Property, plant and equipment.

Table 8: Consolidated balance sheet per cwt of member milk, by

type and size of profiled dairy cooperative, 2012

the “value-added” focus of the niche-marketing 

cooperatives, where they aim to command higher 

prices by the uniqueness of their products. 

Conversely, bargaining-only cooperatives add 

little “value” to members’ milk, focusing primarily 

on finding markets for it. Diversified cooperatives, 

which sell a substantial portion of their milk at the 

first handler level while also making some bulk and 

value-added products, had the second-highest dairy 

product sales, $24.06 per cwt. This includes $1.01 

per cwt in export sales.

Diversified cooperatives had markedly higher 

supply and other sales, $7.33 per cwt, than did 

bargaining-only or niche-marketing cooperatives, 

which had sales per cwt of $1.08 and 12 cents, 

respectively. 

Service receipts and other income per cwt were 

highest for niche-marketing cooperatives, 27 cents, 

followed by diversified cooperatives at 20 cents. 

Bargaining-only cooperatives had just 6 cents per 

cwt of service receipts and other non-dairy income. 
8 Financial Profile of Dairy Cooperatives, 2012

Bargaining-only 

cooperatives reported 

patronage refunds 

received of 4 cents per 

cwt, but niche-marketing and diversified 

cooperatives had essentially no patronage 

refunds per cwt.

Total revenue 

varied by over $11 

per cwt between the 

different types of 

cooperatives. Nichemarketing cooperatives had the highest 

total revenue per cwt, 

$32.69, followed 

closely by diversified cooperatives at 

$31.59. Bargainingonly cooperatives 

had the lowest total 

revenue, $21.61 per 

cwt. Total costs and 

expenses ranged from 

$21.54 for bargainingonly cooperatives to 

$32.69 for niche-marketing cooperatives.

Net margins before 

taxes were 20 cents 

per cwt for diversified cooperatives, 

while niche-marketing 

cooperatives had 

virtually no pretax net 

margins. Bargainingonly cooperatives had 

net margins of 7 cents 

per cwt. Net margins 

before tax represented 

0.6 percent of total 

revenue for diversified 

cooperatives and 0.3 

percent for bargainingonly cooperatives. 

Type of cooperative

 

	 Bargaining-	 Niche-	

Size category	 All	 only	 marketing	 Diversified

Dollars per cwt

Milk and dairy product sales 23.69 20.42 32.29 24.06

Supply and other sales 6.68 1.08 0.12 7.33

Service receipts & other income 0.19 0.06 0.27 0.20

Patronage refunds received 0.00 0.04 0.00 0.00

 Total revenue 30.56 21.61 32.69 31.59

Cost of goods sold 28.48 20.92 30.54 29.34

Expenses 1.71 0.61 2.08 1.84

Non-operating income and 

 non-recurring losses 0.19 0.01 0.07 0.21

Total costs and expenses 30.38 21.54 32.69 31.39

Net margins before tax 0.19 0.07 0.00 0.20

(million pounds)

Total milk handled 160,005 16,483 261 143,261

Note: Totals may not add due to rounding; cwt = hundredweight.

Table 9: Profiled dairy cooperatives’ consolidated operating 

statement, per cwt of total milk handled, overall and by 

type of cooperative, 2012

Size Group

Item	 Small	 Medium	 Large

Dollars per cwt

Milk and dairy product sales 20.62 23.11 23.75

Supply and other sales 16.74 1.40 7.02

Service receipts and other income 0.32 0.08 0.19

Patronage refunds received 0.25 0.05 0.00

Total revenue 37.93 24.64 30.96

Cost of goods sold 33.81 23.34 28.83

Expenses 2.46 1.18 1.75

Non-operating income and 

 non-recurring losses 0.00 (0.07) 0.21

Total costs and expenses 36.26 24.45 30.78

Net margins before tax 1.67 0.19 0.18

Total milk handled (million pounds) 531 10,701 148,772

Note: Totals may not add due to rounding; cwt = hundredweight.

Table 10: Profiled dairy cooperatives’ consolidated operating 

statement per cwt of total milk handled, by size of 

cooperative, 2012
Financial Profile of Dairy Cooperatives, 2012 9

Operating Statement 

by Size

As seen with the 

balance sheets by 

size, the structure of 

the operating statement varied among 

the different size 

groups (table 10). 

Milk and dairy product sales per cwt of 

milk handled were 

lowest for the small 

cooperatives, $20.62, 

and highest for the 

large cooperatives, 

$23.75. This was followed closely by the 

medium-sized cooperatives at $23.11 per 

cwt.

Small cooperatives 

also had the highest supply and other 

sales, $16.74 per cwt. This far exceeded mediumsized cooperatives, which had the lowest supply 

and other sales of $1.40 per cwt. Small cooperatives 

also showed the highest service receipts and other 

income, 32 cents per cwt, and patronage refunds received, 25 cents per cwt. As a result, small cooperatives had the highest total revenue, $37.93 per cwt, 

while medium-sized cooperatives had the lowest at 

$24.64. 

Total costs and expenses per cwt of milk handled 

were the highest for small cooperatives at $36.26, 

while medium-sized cooperatives ranked lowest 

at $24.45. Large cooperatives were again in the 

middle at $30.78 per cwt.

Net margins before tax per cwt were similar for 

the medium-sized and large cooperatives, 19 cents 

and 18 cents, respectively. The small cooperatives’ 

net margins before taxes of $1.67 per cwt were the 

largest of the three size groups. 

Table 11 shows the operating statement by size of 

bargaining-only and diversified cooperatives. The 

small bargaining-only cooperatives generated over 

half of their total revenue from sales of supplies and 

other non-dairy items. The small bargaining-only 

cooperatives had the largest net margins before taxes compared to medium-size and large bargainingonly cooperatives. Net margins for large bargainingonly cooperatives were negative for 2012. 

Large diversified cooperatives had higher total 

revenue than medium-sized diversified co-ops due 

to having four times more sales of supplies and other non-dairy items. However, the large diversified 

cooperatives had greater total costs and expenses, 

due to higher costs of goods sold. Their net margins 

before taxes were lower than for medium-sized 

diversified cooperatives.

Ratios

The relationships between various items in the 

balance sheet and operating statement can be used 

to analyze comparative dairy cooperative performance. The ratios overall and by type and by size 

are shown in table 12 (next page).

The ability to meet current obligations can be 

evaluated by calculating the cooperatives’ current 

ratio: current assets divided by current liabilities. 

Bargaining-only	 Diversified

Item	 Small	 Medium	 Large	 Medium	 Large	

Dollars per cwt of member milk

Milk and dairy product sales 20.01 20.55 20.35 27.68 23.97

Supply and other sales 19.50 1.27 0.00 1.75 7.47

Service receipts & other income 0.22 0.12 0.01 0.00 0.21

Patronage refunds received 0.29 0.07 0.00 0.01 0.00

 Total revenue 40.03 22.00 20.36 29.44 31.65

Cost of goods sold 36.02 21.14 19.99 27.24 29.39

Expenses 2.13 0.79 0.39 1.98 1.84

Non-operating income and 

non-recurring losses (0.01) (0.01) 0.02 (0.21) 0.22

Total costs and expenses 38.14 21.91 20.40 29.01 31.45

Net margins before tax 1.89 0.09 (0.04) 0.43 0.19

 Million pounds

Total milk handled 455 7,053 8,975 3,464 139,797

Number 25 32 3 6 19

Note: Totals may not add due to rounding; cwt = hundredweight.

Table 11: Profiled dairy cooperatives’ consolidated operating 

statement, per cwt of total milk handled, by type and size, 

2012
10 Financial Profile of Dairy Cooperatives, 2012

Overall, cooperatives had $1.25 in current assets for 

each $1 of current liabilities, a current ratio of 1.25. 

Diversified cooperatives also showed a current ratio 

of 1.26 while bargaining-only cooperatives had a 

ratio of 1.17. In contrast, niche-marketing cooperatives had 76 cents in current assets for every $1 of 

current liabilities. Current ratios according to cooperative size ranged from 1.15 for the medium-sized 

cooperatives to 1.45 for the small cooperatives.

A longer term measure of financial health compares obligations with member equity. Total longterm liabilities, divided by member equity, shows 

the level which members are providing the cooperative’s risk capital. Overall, long-term liabilities 

came to 98 percent of total equity in 2012. Relative 

to the other groups, diversified cooperatives had 

a markedly higher level of long-term liabilities at 

$1.00 of long-term liabilities for each $1 of member 

equity. Bargaining-only cooperatives reported the 

lowest ratio: 53 cents of long-term liabilities for 

each $1 of equity. Niche-marketing cooperatives 

had a ratio of 0.61. The ratio improved as the size 

group decreased—ranging from 1.02 for the large 

cooperatives to 0.12 for the small cooperatives.

Fixed assets and investments are the most permanent assets owned by cooperatives. The ratio 

of member equity to fixed assets and investments 

indicates the degree to which these 

permanent assets are 

financed by the most 

permanent capital, 

member’s equity. 

Overall, cooperatives 

had 67 cents in equity 

for each $1 invested 

in fixed assets and 

investments. Bargaining-only cooperatives, with relatively 

few fixed assets 

and investments per 

cooperative, had the 

highest ratio, 0.76, 

while niche-marketing cooperatives had 

the lowest ratio of 43 

cents of equity for 

each $1 of fixed assets and investments.

The ratio of equity to fixed assets and investments dropped as the size category increased. The 

ratio ranged from 1.40 for small cooperatives to 

0.66 for large cooperatives. Medium-size cooperatives had a ratio of 1.05. 

Return to members’ investment in a cooperative can be measured in several ways. The ratios 

calculated here indicate a cooperative’s success in 

providing a financial return on member investment. 

However, in a dairy cooperative “profit” may be an 

imprecise term because the cooperative’s pricing 

policy plays a large role in the amount of “profit” a 

co-op has. Cooperative profits may be lower if a cooperative’s board decides to pay higher milk prices, 

premiums, etc. to members for their milk (in which 

case the membership benefits from these relatively 

higher prices). 

The return-to-equity ratio measures profitability 

relative to member investment after all claims on 

returns are accounted for. Net margin divided by 

total member equity was 8.4 percent for all dairy 

cooperatives in 2012. Ideally, return-to-member 

equity should equal or exceed what members could 

earn if the capital were invested elsewhere (the opportunity cost of investing in the cooperative). 

Diversified cooperatives’ return on equity averType of cooperative	 Size group

Bargaining-	 NicheItem	 All 	 only 	marketing	 Diversified	 Small	 Medium	 Large

Ratio

Capitalization

Current ratio 

(working capital)	 1.25	 1.17	 0.76	 1.26	 1.45	 1.15	 1.26

Long-term liabilities 

 to equity 0.98 0.53 0.61 1.00 0.12 0.19 1.02

Equity to fixed assets

 and investments 0.67 0.76 0.43 0.67 1.40 1.05 0.66

 Percent

Return on investment

Return1

 on equity 8.4 8.7 0.2 8.4 41.2 13.7 7.9

Return1 on total assets 2.1 3.1 0.0 2.1 20.4 4.9 2.0

1

Net margins before taxes used in calculation.

Table 12: Financial ratios, overall and by type and by size of profiled

dairy cooperative, 2012
Financial Profile of Dairy Cooperatives, 2012 11

aged 8.4 percent while niche-marketing cooperatives’ return on equity came to just 0.2 percent. 

Return on equity declined as the size category 

increased, ranging from 41.2 percent for small cooperatives to 7.9 percent for large cooperatives. 

Return to total assets (net margins before taxes, 

divided by total assets) measures the effectiveness 

of the cooperative in employing its assets to generate profits. This averaged 2.1 percent for dairy 

cooperatives. Bargaining-only cooperatives showed 

a 3.1–percent return to the assets employed by dairy 

cooperatives, but niche-marketing cooperatives had 

virtually no return on their assets. Small cooperatives again showed the highest return, 20.4 percent 

of total assets. Medium-size cooperatives averaged 

the next largest return on total assets, 4.9 percent, 

while the large cooperatives’ net margins were just 

2.0 percent of total assets in 2012.

Discussion

While a majority of the cooperatives included in the 

financial profile did not report any sales of supplies 

or other non-dairy items, 7.9 percent of the cooperatives profiled earned a majority of their total sales 

and income from these items. For these few cooperatives, the provision of farm supplies to members 

was a major focus of cooperative operations. Sale of 

these items provided more revenue than did sales of 

milk and dairy products. A majority of these cooperatives were small, bargaining-only cooperatives. 

These farm supply operations affect the cooperatives’ financial statements. For example, tables 13 

and 14 compare the financial statements of cooperatives that derived a majority of total revenue from 

supply and other sales versus cooperatives where 

these sales accounted for a minor share of revenue. 

For cooperatives that earned a majority of their 

revenue from supply and other non-dairy sales, 

these sales amounted to $72.93 per cwt of milk handled. Their milk and dairy product sales of $30.34 

per cwt were just 29.3 percent of revenue. In contrast, for most of the profiled cooperatives—those 

with minor or no supply and other sales—these sales 

equaled just 41 cents per cwt of milk handled. These 

co-ops earned 97.5 percent of their revenue from 

Table 13: Comparison of profiled dairy

cooperatives’ operating statements per cwt of member milk, 

by share of total sales and 

income from supply 

Supply and other sales

>50% of 	 <50% of

Item	 total sales	 total sales

Milk and dairy product sales 30.34 23.07

Supply and other sales 72.93 0.41

Service receipts & other income 0.16 0.19

Patronage refunds received 0.02 0.00

Total revenue 103.44 23.67

Cost of goods sold 94.31 22.25

Expenses 6.85 1.23

Non-operating income and 

 non-recurring losses 0.39 0.17

Total costs and expenses 101.55 23.65

Net margins before tax 1.89 0.02

Total milk handled (million lbs.) 13,829 146,176

Note: Totals may not add due to rounding; cwt = hundredweight.

Table 14: Comparison of the balance 

sheets of profiled dairy 

cooperatives, per cwt of 

member milk, by share of total 

sales and income from supply 

Supply and other sales

>50% of 	 <50% of

Item	 total sales	 total sales

Current assets 33.17 3.73

Net PP&E1 and other assets 13.18 2.31

Investments in other co-ops 2.71 0.52

 Total assets 49.05 6.56

Current liabilities 27.33 2.88

Long-term liabilities 12.22 1.66

 Total liabilities 39.55 4.54

 Total equity 9.50 2.02

 Total liabilities and equity 49.05 6.56

Member milk (million pounds)13,068 114,874

Note: Totals may not add due to rounding; cwt = hundredweight.

1

 Property, plant and equipment
12 Financial Profile of Dairy Cooperatives, 2012

milk and dairy product sales or $23.07 

per cwt.

On a per-cwt-ofmilk-handled basis, 

cooperatives with 

a majority of total 

revenue derived 

from supplies and 

other non-dairy sales 

reported net margins 

before taxes of $1.89. 

In contrast, co-ops 

with a minor proportion of total revenue 

derived from supply 

and other items had 

only 2 cents per cwt 

in net margins.

The total assets 

employed by cooperatives with substantial supply operations 

came to $49.05 per 

cwt of member milk, 

while cooperatives 

with only a minor 

proportion of supplies 

and other sales employed much fewer 

assets per cwt, $6.56 

(table 12). Likewise, 

those with limited 

supply and other sales 

had the lowest equity 

investment per cwt of 

member milk, $2.02, 

as compared to $9.50 

per cwt for those with 

a majority of total 

revenue from supply 

and other non-dairy 

sales. The operations that facilitate 

the supply and other 

sales likely require a 

unique set of addi-

	 Bargaining-	 Niche-	

Item	 All	 only	 marketing	 Diversified	

Dollars per cwt of member milk

Total assets

 2012 10.90 2.31 8.04 12.15

 2007 8.41 1.74 12.54 10.09

Total liabilities

2012 8.12 1.49 6.29 9.08

2007 6.09 1.31 7.76 7.30

Equity

 2012 2.78 0.82 1.75 3.07

 2007 2.32 0.42 4.78 2.79

Member milk (million pounds)

 2012 127,942 16,232 261 111,449

 2007 142,865 28,902 1,034 112,929

Dollars per cwt of total milk handled

Milk & dairy product sales

 2012 23.69 20.42 32.29 24.06

 2007 23.68 18.40 48.22 24.71

Total revenue

 2012 30.56 21.61 32.69 31.59

 2007 27.03 19.27 48.30 28.65

Net margins before tax

 2012 0.19 0.07 0.00 0.20

 2007 0.25 0.05 0.66 0.29

 

Return on equity

 2012 8.4 8.7 0.2 8.4

 2007 12.2 12.8 13.8 12.1

Return on assets

 2012 2.1 3.1 0.0 2.1

 2007 3.4 3.1 5.3 3.4

Total milk handled (million pounds)

 2012 160,005 16,483 261 143,261

 2007 163,683 30,507 1,039 132,137

Number of cooperatives

 2012 89 60 4 25

 2007 94 60 9 25

Note: Totals may not add due to rounding; cwt = hundredweight.

Table 15: Comparison of financial profile dairy cooperatives per cwt,

overall and by type of cooperative, 2007 and 2012
Financial Profile of Dairy Cooperatives, 2012 13

tional assets to support the activities, differing from 

those employed to market members’ milk.

Comparison with 2007 

It may be useful to compare 2012 survey results 

with the results from the 2007 survey (table 15). 

However, be aware that the numbers have not been 

adjusted to reflect changes in price levels over time. 

Please note also that there were some differences in 

the sets of cooperatives included in each study. For 

example, twice as many niche-marketing cooperatives provided financial data in 2007 (and a greater 

proportion of the existing niche-marketing cooperatives) as compared with 2012. And, to the extent 

existing cooperatives’ operating practices changed 

between survey years, they would have been reclassified accordingly.

Total assets per cwt of member milk were more 

than $2 per cwt higher in 2012 than in 2007. Total 

liabilities also increased by over $2 per cwt. Member equity per cwt showed much less change. Member equity in 2012 was just 46 cents per cwt higher 

than in 2007. So, a smaller proportion of total assets 

was supported by member equity in 2012 (25.5 

percent) relative to 2007 (27.6 percent). 

Milk and dairy product sales per cwt of milk 

handled in 2012 were a mere 1 cent per cwt above 

those in 2007. However, 2012 total revenue was 

$3.53 per cwt higher than in 2007. The higher total 

revenue in 2012 was due to the profiled cooperatives having twice the supply and other sales ($6.68 

per cwt) as in 2007 ($3.13 per cwt). 

Net margins before tax were 6 cents per cwt 

lower than in 2007. And, measures of financial 

performance (return on assets and return on equity) 

were also lower in 2012 than in 2007. 

Summary

The financial information presented in this study 

was provided by a majority of the cooperatives 

in the United States that handled (bovine) milk. 

Results by general categories of operational focus 

show that the average financial performance varied between groups by type of operations. Average financial performance also varied between 

cooperatives when grouped by size (in terms of the 

volume of milk handled). Furthermore, there were 

differences between groups of cooperatives using 

the same operational focus but handling different 

amounts of milk. Some key observations include:

• Diversified cooperatives represented 28.1 percent of the profiled cooperatives but held 97.2 

percent of the assets and accounted for 90.9 

percent of milk and dairy product sales.

• Bargaining-only cooperatives made up 67.4 

percent of the profiled cooperatives, but accounted for 8.9 percent of the milk and dairy 

product sales and just 2.7 percent of total 

assets held by the dairy cooperatives included 

in this study.

• Niche-marketing cooperatives were a small 

segment of the dairy cooperatives in this 

study, 4.5 percent, and their member milk, 

assets, and dairy product sales were each only 

0.2 percent of all profiled dairy cooperatives.

• Large, diversified cooperatives utilized the 

most assets per cwt of members’ milk.

• Large, bargaining-only cooperatives utilized 

the least assets per cwt and had negative net 

margins before tax.

• Small, bargaining-only cooperatives had more 

supply and other non-dairy sales than milk 

and dairy product sales and the largest net 

margins before tax per cwt of milk handled.

• About 25 percent of the profiled cooperatives 

had negative net margins before income tax. 

A somewhat smaller proportion of diversified 

cooperatives had negative returns relative to 

the other types.

This study should help clarify the performance of 

dairy cooperatives in the United States and provide 

some valuable comparisons by size and type. It also 

provides a means for dairy cooperatives to examine 

their own financial records in 2012 to see how they 

compare to the aggregate statistics of the profiled 

cooperatives.

References

Ling, Charles K. Marketing Operations of Dairy 

Cooperatives, 2012. Research Report No. 230, 

U.S. Department of Agriculture, Rural Development, Rural Business-Cooperative Service, 

Washington, DC, May, 2014.
14 Financial Profile of Dairy Cooperatives, 2012

Type of cooperative

All financial profile 	 Bargaining-	 Niche-	

Item	 dairy cooperatives	 only	 marketing	 Diversified

---------------------------------------------------- $1,000 -----------------------------------------

Balance sheet

Current assets 8,623,306 201,040 10,281 8,411,985

Net PP&E1 and other assets 4,371,161 130,279 9,376 4,231,506

Investment in other co-ops 945,765 43,957 1,323 900,484

 Total assets 13,940,232 375,275 20,981 13,543,976

Current liabilities 6,883,583 172,291 13,607 6,697,684

Long-term liabilities 3,499,336 70,197 2,786 3,426,354

 Total liabilities 10,382,920 242,488 16,393 10,124,038

Common stock 1,163 99 5 1,060

Preferred stock 247,959 18,430 0 229,529

Allocated equity 2,980,614 91,457 3,946 2,885,211

Retained earnings/

 unallocated equity 270,680 22,802 637 247,241

Non-controlling minority 

 interests 56,896 - - 56,896

 Total member equity 3,557,312 132,787 4,588 3,419,938

Liabilities and equity 13,940,232 375,275 20,981 13,543,976

Member milk (million pounds) 127,942 16,232 261 111,449

Sales and income

Milk & dairy product sales 37,912,890 3,366,543 84,251 34,462,096

Supply and other sales 10,684,699 178,041 315 10,506,343

Service receipts & other income2 299,017 10,448 711 287,857

Patronage refunds received 7,605 6,115 3 1,487

 Total revenue 48,904,210 3,561,147 85,281 45,257,783

Cost of goods sold 45,564,875 3,448,797 79,672 42,036,407

Expenses 2,739,858 99,936 5,418 2,634,504

Non-recurring losses & 

 (non-operating income) 301,477 835 183 300,460

 Total costs and expenses 48,606,211 3,549,568 85,273 44,971,371

 

Net margins before tax 297,999 11,579 8 286,412

Number of cooperatives 89 60 4 25

Milk handled (million pounds)3 160,005 16,483 261 143,261

Note: Totals may not add due to rounding.

1 Property, plant and equipment.

2 Includes non-recurring gains.

3

 Total milk volume handled by cooperatives (including inter-cooperative transfers). 

Appendix table 1: Consolidated financial statements overall and by type of profiled

dairy cooperative, 2012

APPENDIX TABLES
Financial Profile of Dairy Cooperatives, 2012 15

Size Group

Item	 Small	 Medium	 Large

---------------------------------------------------- $1,000 -----------------------------------------

Balance sheet $1,000

Current assets 28,129 283,391 8,311,785

Net PP&E1 and other assets 5,369 107,361 4,258,431

Investment in other co-ops 10,060 37,111 898,594

 Total assets 43,558 427,863 13,468,811

Current liabilities 19,409 246,435 6,617,739

Long-term liabilities 2,580 29,473 3,467,283

 Total liabilities 21,989 275,907 10,085,022

Common stock 51 76 1,036

Preferred stock 2 228 247,729

Allocated equity 17,552 110,566 2,852,495

Retained earnings/

 unallocated equity 3,963 41,086 225,631

Non-controlling minority 

 interests 0 0 56,896

 Total member equity 21,569 151,956 3,383,788

 

Liabilities and equity 43,558 427,863 13,468,811

Member milk (million pounds) 531 10,481 116,929

Sales and income 

 

Million dollars

Milk and dairy product sales 109,615 2,473,538 35,329,737

Supply and other sales 88,961 150,049 10,445,688

Service receipts and other income2 1,712 8,311 288,994

Patronage refunds 1,333 5,292 980

 Total revenue 201,621 2,637,190 46,065,399

Cost of goods sold 179,680 2,498,118 42,887,077

Expenses 13,066 126,131 2,600,661

Non-recurring losses & 

 (non-operating income) (18) (7,815) 309,311

 Total costs and expenses 192,728 2,616,434 45,797,049

Net margins before tax 8,893 20,756 268,350

Number of cooperatives 27 40 22

Total milk handled (million lbs)3 531 10,701 148,772 

Note: Totals may not add due to rounding.

1 Property, plant and equipment.

2 Includes non-recurring gains.

3

 Total milk volume handled by cooperatives (including inter-cooperative transfers). 

Appendix table 2: Consolidated financial statements, by size of profiled dairy 

cooperative, 2012
16 Financial Profile of Dairy Cooperatives, 2012

Type of cooperative

Bargaining-	 Niche-	

Item	 All	 only	 marketing	 Diversified

Percent of total assets

Current assets 61.9 53.6 49.0 62.1

Net PP&E1 and other assets 31.4 34.7 44.7 31.2

Investment in other co-ops 6.8 11.7 6.3 6.6

Total assets 100.0 100.0 100.0 100.0

Current liabilities 49.4 45.9 64.9 49.5

Long-term liabilities 25.1 18.7 13.3 25.3

Total liabilities 74.5 64.6 78.1 74.7

Equity 25.5 35.4 21.9 25.3

Liabilities and equity 100.0 100.0 100.0 100.0

Note: Totals may not add due to rounding.

1 Property, plant and equipment.

Appendix table 3: Common-sized balance sheet, by type of profiled dairy 

cooperative, 2012

Size Group

Item	 Small	 Medium	 Large

Percent of total assets

Current assets 64.6 66.2 61.7

Net PP&E1 and other assets 12.3 25.1 31.6

Investments in other co-ops 23.1 8.7 6.7

 Total assets 100.0 100.0 100.0

Current liabilities 44.6 57.6 49.1 

Long term liabilities 5.9 6.9 25.7

 Total liabilities 50.5 64.5 74.9

Equity 49.5 35.5 25.1

Liabilities and equity 100.0 100.0 100.0

Note: Totals may not add due to rounding.

1 Property, plant and equipment.

Appendix table 4: Common-sized balance sheet, by size of profiled dairy 

cooperative, 2012
Financial Profile of Dairy Cooperatives, 2012 17

Type of cooperative

Bargaining-	 Niche-	

Item	 All	 only	 marketing	 Diversified

Percent of total assets

Milk and dairy product sales 77.5 94.5 98.8 76.1

Supply and other sales 21.8 5.0 0.4 23.2

Service receipts and other income1 0.6 0.3 0.8 0.6

Patronage refunds received 0.0 0.2 0.0 0.0

 Total revenue 100.0 100.0 100.0 100.0

Cost of goods sold 93.2 96.8 93.4 92.9

Expenses 5.6 2.8 6.4 5.8

Non-operating income and 

 non-recurring losses 0.6 0.0 0.2 0.7

 Total costs and expenses 99.4 99.7 100.0 99.4

Net margins before tax 0.6 0.3 0.0 0.6

Note: Totals may not add due to rounding.

1 Property, plant and equipment.

Appendix table 5: Common-sized operating statement, by type of profiled dairy 

cooperative, 2012

Size Group

Item	 Small	 Medium	 Large

Percent of total assets

Milk and dairy product sales 54.4 93.8 76.7

Supply and other sales 44.1 5.7 22.7

Service receipts and other income1 0.8 0.3 0.6

Patronage refunds received 0.7 0.2 0.0

 Total revenue 100.0 100.0 100.0

Cost of goods sold 89.1 94.7 93.1

Expenses 6.5 4.8 5.6

Non-operating income and 

 non-recurring losses 0.0 (0.3) 0.7

 Total costs and expenses 95.6 99.2 99.4

Net margins before tax 4.4 0.8 0.6

Note: Totals may not add due to rounding.

1 Includes non-recurring gains.

Appendix table 6: Common-sized operating statement, by size of profiled dairy 

cooperative, 2012
18 Financial Profile of Dairy Cooperatives, 2012

Non-Discrimination Policy 

 The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, 

and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender 

identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, 

sexual orientation, or all or part of an individual’s income is derived from any public assistance program, 

or protected genetic information in employment or in any program or activity conducted or funded by the 

Department. (Not all prohibited bases will apply to all programs and/or employment activities.) 

 

 To File an Employment Complaint 

 If you wish to file an employment complaint, you must contact your agency’s EEO Counselor (PDF) 

within 45 days of the date of the alleged discriminatory act, event, or in the case of a personnel action. Additional information can be found online at http://www.ascr.usda.gov/complaint_filing_file.html. 

 

 To File a Program Complaint 

 If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at http://www.ascr.usda.gov/complaint_filing_cust.html, 

or at any USDA office, or call (866) 632-9992 to request the form. You may also write a letter containing 

all of the information requested in the form. Send your completed complaint form or letter to us by mail 

at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., 

Washington, D.C. 20250-9410, by fax (202) 690-7442 or email at program.intake@usda.gov. 

 Persons with Disabilities 

 Individuals who are deaf, hard of hearing or have speech disabilities and you wish to file either an EEO 

or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 

845-6136 (in Spanish). 

Persons with disabilities who wish to file a program complaint, please see information above on how to 

contact us by mail directly or by email. If you require alternative means of communication for program 

information (e.g., Braille, large print, audiotape, etc.) please contact USDA’s TARGET Center at (202) 

720-2600 (voice and TDD). 

 Supplemental Nutrition Assistance Program 

 For any other information dealing with Supplemental Nutrition Assistance Program (SNAP) issues, persons should either contact the USDA SNAP Hotline Number at (800) 221-5689, which is also in Spanish 

or call the State Information/Hotline Numbers. 

 All Other Inquiries 

 For any other information not pertaining to civil rights, please refer to the listing of the USDAAgencies 

and Offices for specific agency information.