Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
   
   
   
   
    
   
   
   
   
   

Agricultural News


CoBank Report Identifies New Drivers Emerging in the Rising Co-op Consolidation Trend

Wed, 10 Jul 2019 14:18:20 CDT

CoBank Report Identifies New Drivers Emerging in the Rising Co-op Consolidation Trend Surprising new drivers are emerging in the ongoing consolidation of agricultural cooperatives. Although co-ops continue to consolidate to gain business efficiencies, management succession and employee recruitment are among the new factors driving consolidation, according to a new report from CoBank’s Knowledge Exchange division. The report identifies key drivers of the long-term consolidation trend and includes perspectives from several co-op executives and other experts across the United States.



“Co-ops have continued to consolidate even as the number of farms and farmers has stabilized,” said Dan Kowalski, vice president, Knowledge Exchange, CoBank. “That signals a transition from the defensive consolidations we’ve seen in the past to the offensive consolidations we’re seeing more recently.”



Consolidation among farm cooperatives continues to mirror trends throughout production agriculture. Farming operations are growing larger, with average acreage of 444 acres in 2017, up from 418 acres 10 years earlier. In turn, the businesses that serve American farms 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.



Current economic conditions make organizational efficiencies and synergies even more important. “Many farmers are under financial distress. Depressed incomes and tight margins can affect cooperative viability and make a merger look more attractive,” said Kowalski. “Many recent consolidations represent mergers of equally strong organizations. But in some cases, a stronger cooperative can take over a business that is suffering financially and inject capital to turn it around.”



No matter what drives it, consolidation has a profound impact on a cooperative and its stakeholders. On the plus side, a strong and healthy co-op brings benefits to the community in the form of patronage dividends, equity retirements and capital investments.



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.



“We expect consolidation among agricultural cooperatives to continue as the industry confronts persistent challenges in agricultural markets and the steady pressure to gain scale in pursuit of competitive advantage,” said Kowalski.



A video synopsis and the full report, Co-op Consolidation, are available on cobank.com.



Source - CoBank



   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Renowed Wheat Breed Erik Von Baer Talks Breeding Practices and Philosophy With OALP Class XIX  Wed, 26 Feb 2020 19:11:50 CST
  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m. Wednesday, February 26, 2020  Wed, 26 Feb 2020 15:16:49 CST
  • Wednesday, February 26, 2020 Market Wrap-Up with Justin Lewis  Wed, 26 Feb 2020 14:37:42 CST
  • Kim Farber, Drummond, OK, Inducted Into Oklahoma Conservation Hall of Fame  Wed, 26 Feb 2020 14:47:01 CST
  • PenCheck--World-Renowned Expert Touts New African Swine Fever Test on China TV   Wed, 26 Feb 2020 11:51:46 CST
  • Randy Gilbert and Rusty Gosz Named 2020 OYE Show Honorees  Wed, 26 Feb 2020 11:59:42 CST
  • RFA Welcomes Bill Targeting Big Oil's Big Subsidies  Wed, 26 Feb 2020 11:22:24 CST
  • Friday Is the Last Day to Set Appointment with Your FSA Office to Compete in CRP General   Wed, 26 Feb 2020 09:31:46 CST

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma City Farm Show KIS FUTURES, INC. Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment AFR Insurance Stillwater Milling Oklahoma Cattlemen's Association

    Our Road to Rural Prosperity sponsors!

    Banc First OPSRC ORWA TPAOO TPAOO

    Search OklahomaFarmReport.com


       
       
    © 2008-2020 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.