California Farm Cooperatives Leading Nation in Net Volume

California’s farm cooperatives have become the leaders nationally in the net volume of business they transact.

“We’ve been No. 2 as far as the dollar volume of business for quite a long time, usually right behind Iowa,” said Leland H. Ruth, president of the Agricultural Council of California, which represents farmer cooperatives.

“The reason we’ve moved ahead of Iowa is that the grain market is sick,” Ruth explained.

Of course, California’s growers also have been hurt badly by economic troubles of recent years, but with more than 250 crops in the state, the overall picture is brighter than in Midwest areas that rely mainly on corn or wheat.

“Our crops depend on exports; we’re an export-oriented state, so we’re having a tough time,” Ruth said.

Imports of foreign crops to the United States also are taking a toll on cooperatives.

Fruit Imports Cited

Tri/Valley Growers, a large deciduous fruit and tomato canning and marketing cooperative, gives imports part of the blame for a decline in its profits from $25.4 million in 1984 to $5.2 million last year.

“Last marketing year, imported fruit was 12% of the market. . . . A year earlier it was zero,” said Travis Mullenix, president and chief executive officer of Tri/Valley.

About 10% of the tomatoes consumed in the United States also come from abroad, he said.

However, Ruth thinks the economy may be slowly improving for California farmers this year.

“As I go to agriculture meetings around the state, I sense things are a little better this year, not a lot,” he added in a telephone interview. “The export market has improved a little bit, and growers’ income is improving.”

California farmers have formed more than 300 cooperatives over the years, often to market their produce, but also to provide central purchasing or processing such as drying, hulling, canning or ginning of crops.

$5.3 Billion a Year

“It’s hard to find a commercial crop that isn’t marketed by a cooperative someplace in the state,” Ruth says.

California’s agriculture cooperatives generate $5.3 billion worth of business a year, more than a third of all the state’s farm production.

Traditionally, they have provided smaller farmers a way to join together to obtain services and sell their crops in ways they couldn’t afford to do alone or as efficiently.

They began organizing in the state in the early 1900s and many of the original cooperatives still exist, Ruth says.

“The reason marketing cooperatives got a strong start out here was that in those days they were producing in California but marketing in the East,” he explains. “They needed a marketing mechanism to move crops to Eastern markets in an organized fashion.”