UPI Celebrates National Cooperative Month
In recognition of October as National Co-op Month, United Producers, Inc. (UPI) would like to showcase information about cooperatives and why there is value in belonging for our members.
Our Cooperative
UPI is a farmer-owned and operated livestock cooperative that provides livestock marketing, financial and hedging services to the agriculture community in Kentucky, Illinois, Indiana, Michigan, Missouri and Ohio.
Our Mission
“The mission of United Producers is to provide necessary livestock services on a cooperative basis to its members in a business-like manner that will improve their income and be competitive in the industry.”
United Producers, Inc. is and always has been a member-driven livestock cooperative with a rich heritage rooted in helping to create a better quality of life for our members, their families and their communities.
What are Cooperatives?
A cooperative is a business. Co-ops range in size from small store-fronts to Fortune 500 companies. In many ways, they’re like any other business; but in several important ways they’re unique and different. Cooperatives…
• Are owned and democratically controlled by their members — the people who use the co-op’s services or buy its goods — not by outside investors. Co-op members elect their board of directors from within the membership.
• Return surplus revenues — income over expenses and investment — to members proportionate to their use of the cooperative, not proportionate to their “investment” or ownership share.
• Are motivated not just by profit, but also by service, to meet their members’ needs for affordable and high quality goods or services.
• Exist primarily to serve their members.
• Pay taxes on income kept within the co-op for investment and reserves. Surplus revenues from the co-op are returned to individual members who pay taxes on that income.
Types of Cooperatives
Cooperatives fall into four general categories: consumer, producer, worker and purchasing/shared services.
Consumer — Consumer cooperatives are owned by the people who buy the goods or use the services of the cooperative. They sell consumer goods such as food and outdoors equipment. They provide housing, electricity and telecommunications. And they offer financial, healthcare, childcare, funeral and other services. Almost any consumer need can be met by a cooperative. Examples of consumer cooperatives include all credit unions, housing co-ops, and electric and telephone cooperatives. The largest U.S. consumer cooperative is Seattle-based REI Inc.
Producer — Producer cooperatives are owned by people who produce similar types of products: farmers who grow crops or raise livestock, craftsmen, or artisans. By banding together, they increase their bargaining power with buyers. They also combine resources to better brand and market their products, improving the incomes of their members. Some of the best known producer cooperatives are Land O’Lakes, Florida’s Natural Growers, Ocean Spray, Welch’s, and Cabot Cheese.
Worker — Worker cooperatives are owned by the employees of the business. They operate in all sectors of the economy and provide workers with both employment and ownership opportunities. Examples include employee-owned food stores, processing companies, restaurants, taxicab companies, sewing companies, and timber processors. Examples of worker cooperatives include Equal Exchange Fair Trade Coffee, Alvarado Street Bakery, and the upscale Manhattan restaurant René Pujol.
Purchasing/Shared Services — Purchasing and shared services cooperatives are owned by independent business owners, small municipalities and, in some cases, state governments. They band together to enhance their purchasing power, lowering costs and improving competitiveness. They operate in all sectors of the economy. Well-known examples of purchasing cooperatives are True Value hardware and Carpet One.
Why Co-ops Form
Historically, co-ops were formed when the marketplace failed to provide needed goods or services at affordable prices and acceptable quality. Today, cooperatives offer a better business model that has social as well as economic goals, distributes capital more equitably, and is governed more democratically. Cooperatives allow people to improve their quality of life and enhance their economic opportunities. Throughout the world, cooperatives provide financial services, consumer goods, housing, and other services that would otherwise cost them more, be unavailable, or lack democratic involvement.
Serving Many Needs...
Cooperatives may be organized to provide just about any good or service such as:
• Childcare
• Credit and personal financial services
• Employment
• Equipment, hardware and farm supplies
• Electricity, telephone, Internet and satellite and cable T.V. services
• Food and food services
• Funeral and memorial service planning
• Group purchasing of goods and services
• Health care
• Health insurance
• Housing
• Insurance
• Legal and professional services
• Marketing of agricultural and other products
Cooperatives by the Numbers
• There are more than 21,000 U.S. cooperatives in a wide variety of industries, according to the best current estimate.
• Cooperatives have approximately 130 million members, more than a third of all Americans.
• Cooperatives employ more than 600,000 people, with aggregate payrolls of more than $15.5 billion annually.
• Cooperatives generate annual revenues in excess of $273 billion.
• The top 100 cooperatives had total revenues of more than $150 billion in 2006.
Among Individual Co-op Sectors…
• Agriculture — Three thousand cooperatives, with 2.8 million members, market approximately one-third of U.S. farm products.
• Credit unions — Approximately 8,500 credit unions have more than 90 million members and $750 billion in assets.
• Electric — Nearly 1,000 cooperatives own and maintain nearly half of the electric distribution lines in the United States. Their lines cover three-quarters of the U.S. land mass and provide electricity to 39 million Americans.
• Telecommunications — Some 260 cooperatives provide service to 1.9 million people.
• Housing — Approximately 7,500 cooperatives provide homes for 1.2 million families, or 3 million people.
• Grocery — More than 350 retail and wholesale cooperatives have annual revenues of $33.5 billion. Retail food cooperatives alone have 500,000 members.
• Purchasing — Some 300 cooperatives serve 50,000 independent small businesses. .
Public Attitudes toward Co-ops
A 2003 survey by the National Cooperative Business Association and the Consumer Federation of America found that two-thirds of consumers believe businesses owned and governed by their customers, with consumers on their boards, are more trustworthy than those that do not.
• A majority said that locally owned and controlled companies that allow customers to democratically elect the board of directors are more trustworthy.
• More than 75 percent of those surveyed agreed that co-ops run their businesses in a trustworthy manner, compared with just 53 percent for investor-owned companies.
• More than two-thirds agreed that consumer-owned co-ops are ethically governed, while just 45 percent said the same of investor-owned corporations.
• Co-ops also rated higher than investor-owned companies on questions of value, quality, price, and community commitment.
Sources: National Cooperative Business Association, National Cooperative Month Planning Committee, co-op trade associations, NCB’s Co-op 100, found at http://www.co-op100.coop. You can learn more about cooperatives by visiting http://www.coopmonth.coop/index.html.