They process and market products, sell supplies to farmers and provide services such as livestock transport and grain storage. Farmers are essentially the stockholders of a cooperative and receive dividends on any profits, called patronage by cooperatives, in addition to the price the cooperative pays them for their crops or livestock. Farmers who sell to private business still get the price for their raw farm product but don't share in the profits. Membership in farm cooperatives was 3.6 million last year. The country has only about 2 million farms, many farmers belong to more than one cooperative.
Some cooperatives are diverse.
Kansas City-based Farmland Industries Inc., for instance, operates petroleum refineries and only recently sold its stake in a broadcasting operation. For the farmer, a cooperative gives a way to share money made after a product leaves the farm. A farmer normally receives only about 20 cents on every dollar spent for finished agricultural products, the USDA says. The trend is for cooperatives to move increasingly into processing and selling their own brands. Farmers are looking for ways to help themselves.