What is a Farmer Co-op?

On the most basic level, the definition is pretty straightforward. A farmer cooperative is a business founded by farmers and owned by farmers.

The farmer-owners elect their peers to the co-op board to ensure that the cooperative meets the needs of its members.

Farmer co-ops serve to directly benefit their members. Each farmer-owner receives a share of the cooperative's earnings.

Co-ops bring together individual farmers giving them a chance to work collectively and accomplish what they cannot do on their own.

There are many different types of co-ops, but NCFC’s members are comprised of four main types. These are:

Supply Co-ops

This type of co-op sells just about anything a farmer needs to grow crops or take care of animals. Those supplies include things like feed, seed, fertilizer, fuel, and even services. By combining buying power, individual farmers of all sizes can have a dependable supply of inputs at competitive prices.

Marketing Co-ops

These co-ops take what their members grow and sell it. Even within marketing co-ops, there’s diversity – some simply buy and sell bulk commodities, like corn or soybeans, while others will process what they buy from their members into products that you can buy in the grocery store.

Bargaining Co-ops

This type of co-op negotiates with food processors and others looking to buy crops from the co-op’s farmer-owners. By working together, the farmers obtain better prices for the commodities they produce. Bargaining co-ops are especially prevalent among growers of fruit and vegetables.

Farm Credit System

Farm Credit is a nationwide network of 73 cooperatively-owned financial institutions. They provide loans and related financial services to U.S. farmers and ranchers, farmer-owned cooperatives and other agribusinesses, rural homeowners and rural infrastructure providers.