Indiana-based agriculture and energy cooperative Co-Alliance Cooperative, Inc. has announced it will be paying $57 million in patronage to eligible farmer-members who did business with the cooperative in 2023. Fifty million will be paid back in cash, while the remaining seven million will be returned in equity. This amount represents an exceptional cash return as a member-owned business, reflecting the profitable year the cooperative business had.
Fifty-three percent of Co-Alliance’s 2023 net income will be paid back in patronage, which will arrive to members in January 2024. The remaining profit will be reinvested into the cooperative’s assets to ensure Co-Alliance is prepared to service today’s member owners and the next generation of farm families. It is projected that $80 million will be reinvested in capital improvements to better service the membership.
For a second year in a row, Co-Alliance leads the industry with this type of patronage return. In January 2023, Co-Alliance paid back $45 million dollars to farmer-members, which was fifty-one percent of Co-Alliance’s 2022 net income. Co-Alliance is committed to being competitive in the marketplace in price and quality of service, and the return of this profit to its membership is part of that commitment.
Membership in Co-Alliance is comprised of those who run an active farm operation and complete a membership application. Because of their loyal business with Co-Alliance, the cooperative has delivered continued profitability, expertise, resources, and overall experience for its customers.
Ninety-five percent of the profit derived directly from Co-Alliance’s membership business, is being returned directly to those members. The amount of patronage paid back to each member is based upon the volume of business members completed with the cooperative in the fiscal year. Approximately 6.7% of the members’ business is being paid back this year, as compared to 5.5% in 2022.
“This record amount paid back in cash to our membership is truly a testament to the partnership we have with our farmer-owners. When the local cooperative makes a profit, we ensure a large portion of it goes directly back to those farm families who have made the decision to do business with the cooperative. The model is simple yet compelling: local decisions, local value and local return,” said Kevin Still, Co-Alliance President and CEO. “Everything we do in our business is done with our local membership in mind. The $80 million that will be reinvested in facility improvements – not sent to out-of-state businesses or owners – is proof of that commitment. As Co-Alliance invests in these facilities, the gains felt in operational efficiencies helps drive our capabilities and our overall return to our owners.”
The $57 million back in members’ hands truly demonstrates the local value of the farmer-owned cooperative. This direct payment back to members allows them to reinvest in their communities and small businesses that are the backbone of America. Those in rural America have a heart for service and without question a beneficiary of these dollars will be the local communities Co-Alliance members call home.
“This record patronage amount being paid back is all about our members. This would not have been possible without their decision to choose the cooperative for the services and products they need to run the farm. This cooperative system was created to serve the membership and for 100 years we’ve been doing that. This record patronage payback serves as a great thank you for keeping your service and business local.” said Tim Burke, Chairman of Co-Alliance’s Board of Directors.
Information for this article came from Co-Alliance.