ACCC Fact Sheet Series
The goal of this fact sheet series is to distribute relevant research and information to the cooperative community.
Fact Sheet 9: Monitoring the Evolving Kansas Cooperative Landscape: Mapping Grain Locations in Kansas (PDF)
The cooperative landscape in Kansas is changing rapidly. Infrastructure is being built, competition is rising, new innovations are being developed, and all of this has contributed to fewer grain marketing and farm supply cooperatives in Kansas. In fact, there were 86 Kansas co-ops in September 2015, and by September 2016, that number had fallen to 77. To help Kansas cooperative leaders better understand this evolving landscape, the Arthur Capper Cooperative Center has constructed a set of interactive maps of all cooperatives and non-cooperatives’ grain locations in Kansas. In addition, these maps and fact sheet really highlight the value the cooperative system bring to Kansas farmers. There are more than double the number of cooperative grain locations than non-cooperative grain locations! For more information, please read this fact sheet to learn about the details, need, use, and accessibility of these maps.
Leading and directing a cooperative requires a solid understanding of the co-op’s financial position. In this ACCC Fact Sheet, the DuPont Profitability Model is presented and applied to a set of data that will help cooperative managers and directors understand their co-op’s financial position during periods of financial stress and prosperity. The DuPont Model is straightforward because it breaks down return on equity into its key components. The model shows how margins or “Earns,” efficient use of assets or “Turns,” the “Spread” above cost of debt, and the debt capital structure or “Leverage” impact Kansas grain and farm supply co-ops. In addition, an Excel spreadsheet of the DuPont Profitability Model is provided so you can conduct your own analysis of your cooperative’s financial position.
Fact Sheet 7: Effects of Collective Action Water Policy on Kansas Farmers' Irrigation Decisions: The Case of the Sheridan County 6 LEMA (PDF)
In this ACCC Fact Sheet, Krystal Drysdale, PhD student and CoBank Research Fellow, and Dr. Nathan Hendricks, Assistant Professor in Agricultural Economics, explore the impact of a Local Enhanced Management Area (LEMA) on farmers and crop input suppliers. They estimate the LEMA’s impact on total water use, cropping pattern changes, as well as crop nutrient and seed purchases. Results show that farmers within the LEMA significantly reduce their irrigated water usage and plant fewer total irrigated crop acres, especially corn acres. With fewer corn acres, grain and farm supply cooperatives could be challenged by having fewer bushels coming into the elevator as well as a decline in seed, chemical, and crop nutrient sales in the near future. In the long run, cooperatives could see greater bushels and greater input sales because the reduction in current water use will extend the life of the aquifer. Read the fact sheet to discover more about the authors unique approach to arriving at these results as well as the percentage declines they estimated for water usage, crop acres, and crop inputs used.
Fact Sheet 6: Financial Trends and Needs of Cooperatives and Implications of Consolidation in the Farm Credit System (PDF)
In early 2014, the Farm Credit Administration (FCA) held a symposium titled, "Consolidation in the Farm Credit System: The Factors Influencing Consolidation and the Potential Impact on Mission." The purpose of the symposium was to consider the effects consolidation may have—both positive and negative—on the System's safety and soundness and its ability to fulfill its mission. The symposium was held at the FCA headquarters office in McLean, Virginia.
ACCC Director, Dr. Brian Briggeman, was invited by the FCA board of directors to prepare a report and present the cooperative’s perspective on consolidation during the symposium. The attached ACCC fact sheet is based on his report. In this fact sheet, Dr. Briggeman explores the financial state and future financial needs of agricultural cooperatives. Furthermore, he discusses the implications of consolidation within the Farm Credit System on the cooperative industry. In short, this fact sheet illuminates the importance of a safe and sound Farm Credit System for many cooperatives, their farmer-owners and the rural communities they serve.
In the latest installment to the ACCC fact sheet series, Dr. Brian Briggeman and Chuck Mickelsen explore the evolution of the costs of agricultural production. Today, the costs of agricultural production have surged to the historically high levels of the late 1970s. Comparing these elevated costs to the 1970s shows that technological costs have nearly doubled for today’s producers while land rental costs are fairly low. Looking ahead, economic conditions suggest costs may continue their rise, especially land rents.
Equity generation and composition are important topics for any cooperative. Since 2003, Kansas co-ops’ total equity and the percentage of total equity designated as unallocated equity have both risen significantly. This fact sheet explores these trends and provides talking points for a cooperative's board of directors and management on this topic. (updated 22June2016)
At the center of a solid marketing campaign typically lies an effective advertising plan. If done correctly, advertising can boost sales, but making this link can be difficult because of many competing factors that impact consumer sales. The research within this fact sheet discusses a methodology and illustrates how advertising increased sales of a new product, Sunsweet's Ones prunes brand. Other businesses marketing branded products should identify the impact of advertising on their product sales, and the methodology described in this fact sheet allows them to do just that. Authors: John Crespi (Kansas State University) and Michael Boland (University of Minnesota)
Farmland Value Data: Implications of Survey Accuracy and Reliability.” A hot button issue in agriculture is whether or not farmland values are sustainable or even forming a price bubble. While it is difficult to determine if a bubble is forming, if not impossible, publicly available data does provide insights in near-term trends of farmland values. Presented in this fact sheet are the research results of the accuracy and reliability of land value data as well as information on the recent, staggering rise in values.
Few studies have analyzed preferences for patronage refunds. However, one study found that Farm Credit member-borrowers’ strongly preferred cash patronage payments versus lower fixed real estate loan interest rates. In this fact sheet, these research results as well as talking points on the potential positives and negatives of using patronage as a marketing tool are discussed.