Cooperatives are Member-owned Businesses
Cooperatives are part of the self-help tradition of America. Cooperatives are businesses organized by people to provide needed goods and services. Cooperative businesses:
- are owned by the people who use their services;
- provide an economic benefit for their members;
- are democratic organizations, controlled by their members;
- are autonomous and independent
- recognize the importance of education about cooperative business and organizational practices;
- support cooperation among cooperatives, which has resulted in the growing importance of cooperatives in today’s global economy; and
- exhibit concern for their communities.
Cooperatives Serve Many Needs
Cooperatives provide just about any good or service their members need. Cooperatives offer credit and financial services, health care, child care, housing, insurance, legal and professional services. Cooperatives sell food, farm supplies, hardware and recreational equipment. They provide utilities, such as electricity, telephone, television and Internet service. Cooperatives process and market products and goods for their members.
- Throughout the United States, approximately 48,000 cooperatives serve 120 million citizens. Worldwide, there are an estimated 750,000 cooperatives that serve 730 million members.
- Cooperatives come in all sizes, from small buying clubs to businesses included in the Fortune 500. Many cooperatives are household names—Land O’Lakes, Ocean Spray, Sunkist, ACE Hardware, Nationwide Insurance, and the Associated Press.
- Twenty-nine cooperatives have annual sales in excess of $1 billion. These top cooperatives represent a diverse mix of industries: agriculture, food, hardware, health care, finance, utilities, bottling, recreational equipment and communications.
- About 30 percent of farmers’ products and farm supplies in the United States are marketed through more than 3,000 farmer-owned cooperatives. A majority of the nation’s farmers and ranchers belong to these co-ops.
- Approximately 900 rural electric cooperatives operate nearly half of the electric distribution lines in the United States, covering three-quarters of the land mass. They provide electricity for more than 37 million people in 47 states.
- Consumer-owned and controlled cooperatives pioneered prepaid, group-practice health care. Today cooperative health-maintenance organizations (HMOs) provide health-care services to more than 1.2 million American families. In addition, just about every type of cooperative—consumer, worker, and purchasing/shared services—can be found in the health care sector.
- Nearly 10,000 U.S. credit unions have more than 84 million members and assets in excess of $600 billion.
- More than 250 purchasing co-ops offer group buying and shared services to more than 50,000 independent businesses.
- More than 6,400 housing cooperatives provide dwellings for some three million residents. With 1.5 million cooperative housing units, the co-ops serve households that have a wide range of income levels and housing needs.
- Food cooperatives have been innovators in the marketplace in the areas of unit pricing, consumer protection and nutritional labeling. There are about 500 retail food co-ops in the U.S.
- Nearly 270 telephone cooperatives provide service to 2 million households.
- Some 250 purchasing cooperatives offer group buying and shared services to more than 50,000 independent businesses.
- More than 50 million Americans are served by insurance companies owned by or closely affiliated with cooperatives. There are more than 1,000 mutual insurance companies that total more than $80 billion in net written premiums.
- Two in every five people in the U.S. belong to a cooperative. That’s 40 percent of the U.S. population.
Cooperatives Have a Big Impact on Minnesota’s Economy
According to the most recent study by the USDA Rural Development Service, 3.4 million cooperative members in the Gopher State depend on approximately 1,000 co-ops to market and supply agricultural products as well as to provide credit, financing, electricity, transportation, health care, food, housing, insurance, and many other products and services.
Minnesota co-ops annually record about $6.07 billion in gross sales and they employ approximately 46,000 Minnesota residents, paying nearly $64 million in taxes each year.
Minnesota became one of the first states to enact a law authorizing cooperatives, and has the largest number of cooperatives in the nation. Types of cooperatives include:
- Grain, farm supply, and fuel: Approximately 200 retail farm supply cooperatives provide crop inputs, animal feed, grain marketing, and petroleum products, along with other services to farmers and residents across the state. These cooperatives and their regional wholesale cooperative suppliers CHS Inc. and Land O’ Lakes are responsible for $5.5 billion of annual retail sales in Minnesota. CHS Inc. and Land O’Lakes also rank as two of the largest employers headquartered in Minnesota with combined revenues of nearly $20 billion annually.
- Dairy: Minnesota dairy cooperatives market over 90 percent of the milk produced in the state. MAC dairy cooperative members include: Associated Milk Producers Inc. (AMPI), CROPP Organic Valley, Dairy Farmers of America Inc., Foremost Farms USA, Land O’ Lakes, Bongards’ Creameries, and Swiss Valley Farms.
- Electric: Electric cooperatives play a vital role in their rural communities, providing reliable electricity and so much more. Minnesota has 43 electric co-ops that distribute electricity across the state and several co-ops that generate and transmit power—including Great River Energy and East River Electric, among others
- Housing: Minnesota is a leader in housing cooperatives, particularly in senior housing. The state is home to more than 70 senior housing co-ops, which is more than double all the other states combined.
- Farm Credit Services: Together, the following federally chartered farm credit cooperatives finance Minnesota farm families and agribusinesses with $3.8 billion in loans: AgStar Financial Services, Farm Credit Services of Minnesota Valley, AgCountry Farm Credit Services, and AgriBank. AgriBank, headquartered in St. Paul, is the largest farm credit bank in the U.S. with more than $46 billion in annual loan volume. CoBank also serves agricultural co-ops, utility co-ops, and other needs in rural Minnesota.
- Credit unions: Credit unions are not-for-profit financial cooperatives owned and governed by members via volunteer boards of directors. Credit union earnings are returned to owner/members in the form of lower loan rates, higher interest on deposits, and lower fees. Like all cooperatives, credit unions are committed to their communities, working with other cooperatives to support economic development and worthwhile social causes in their greater areas. There are approximately 300 credit unions in Minnesota.
- Health care: Minnesota’s health care cooperatives are a diverse lot. HealthPartners HMO is a non-profit which follows cooperative principles, and a new health care cooperative for farmers is currently being developed.
- Ethanol: One of the fastest growing Minnesota cooperative sectors is involved with the ethanol industry. These member-owned bio-based facilities are breathing renewed life into the Minnesota countryside.
- Food: The Twin Cities metro area has the highest concentration of food co-ops of any metro area in the U.S.
- Telecommunications: Minnesota is home to local telephone co-ops that offer advanced telecommunications services and help rural Minnesota compete in a world economy.
- Sugar: Nearly 96 percent of sugar production in Minnesota occurs at co-op facilities.
- Other types of cooperatives: Several consumer cooperatives exist in Minnesota, as well as several worker-owned cooperatives.
Cooperatives Are Part of Your Life
Cooperatives are everywhere—helping people meet their common needs through group effort. Look about your community—you’ll probably find a cooperative or two. Some cooperatives do not have the word “cooperative” in their names, so you may not always know the enterprise is cooperatively organized. Yet there are cooperatives for everything. You’ll find them everywhere people need to get things done efficiently and economically. |
