Equity Redemption Practices of Nebraska Farmer Cooperatives

The ability of a cooperative to redeem the equities of members and former members depends on its particular business and financial characteristics. However, data on the equity redemption practices of other cooperatives can provide useful benchmarks for assessing a cooperative’s equity redemption performance. A recent U.S. Department of Agriculture (USDA) report based on a 2008 survey of 792 farmer, rancher, and fishery cooperatives offers valuable information about the equity redemption practices of cooperatives according to organizational form, major business activity, asset size, and geographic location. In particular, the report contains some information specific to Nebraska cooperatives. In 2008, there were 38 marketing cooperatives and 29 farm supply or service cooperatives headquartered in Nebraska. Thirty-one of the marketing cooperatives were classified as grain and oilseed cooperatives based on their major business activity. Farm supply cooperatives headquartered in the state sold petroleum products and lubricants, bioenergy fuels, fertilizer, crop protectants, feed, seed, and other supplies. Participants in the USDA survey consisted of 765 local cooperatives and 27 regional cooperatives. Local cooperatives are characterized by membership and sales in one or two states. The sales of regional cooperatives typically are regional or national in scope. In addition, the membership of regional cooperatives may include local cooperatives. Thirty of the cooperatives included in the survey were local cooperatives located in Nebraska