CoBank: Agricultural Cooperatives Continue Consolidation

A new report from CoBank says the farm economy, business efficiency, and even retiring employees are contributing to agricultural cooperative consolidations.  Cooperatives are seeking business efficiencies amid tough economic conditions in the farm sector, as CoBank researchers said depressed farm incomes and tight margins can affect cooperative viability and make mergers attractive.

Consolidation among farm cooperatives continues to mirror trends throughout production agriculture.  Farming operations are growing larger, with average acreage increasing to 444 acres between 2007 and 2017; a 26 acre increase.

In turn, Ag cooperatives are combining forces to compete and serve larger farmers better.  Cooperatives often merge or consolidate to create economies of scale.  Co-ops may reduce costs, add capital and acquire assets or more sophisticated technology to better serve their membership.

The report said that while co-op numbers continue to shrink, the number of co-op owned facilities and locations seems to be steady or growing.  And, the average co-op now employs more than 100 people, a 33% increase over the last 20 years.

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