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University of Wisconsin. College of Agriculture. Dept. of Agricultural Economics / Cooperation principles and practices: the application of cooperation to the assembling, processing and marketing of farm products, to the purchase of farm supplies and consumers' goods and to credit and insurance

IV. Cooperative purchasing, insurance and credit associations,   pp. 28-39 PDF (3.4 MB)

Page 29

frequently refused to accept their orders, except at the lower current market
prices. This was a common occurrence following the world war. With little
no capital or reserves these buying clubs were, of course, not able to meet
such financial distress. In fact, the losses on a single car load of flour
or sugar
sometimes amounted to several hundred dollars.
    General Farm Supply Associations-Most of the general farm supply
associations in the midwest were organized during 1910-1920. Some have had
outstanding successes, while probably one-third have failed. The extent to
which purchasing associations have developed in the United States and in
Wisconsin is presented in Chapter III. These data do not include the supplies
purchased by several thousand processing and marketing associations for
their own use.
    Farm supply associations usually handle feeds, fertilizers, seeds, twine,
flour, salt, and sometimes hardware, machinery, and allied products. There
were in 1984 about 70 of these specialized associations in Wisconsin and
about an equal number of purchasing associations which handled, in addition
to the above items, substantial quantities of general store merchandise or
troleum products. About 25 associations in the state, mostly creameries,
handled farm supplies as a side line.
    Most of the local feed associations in Wisconsin in 1934 operated on
margin of from 4 to 16 per cent of sales. This means that for each $1.00
patron pays for feed, the association has paid 84 to 96 cents for the product
end has taken 4 to 16 cents with which to pay operating expenses, interest
stock and from which to set aside some reserve funds. Very few of the local
feed associations in the state have paid any patronage dividends. The more
efficient ones usually charge lower prices than the others and in that way
pass on the benefits of their efficiency to their patrons.
    Many local feed associations have installed grinding and mixing machines
so that farmers can bring their home grown grains to the supply association
to be ground or mixed with other feeds for dairy cattle or poultry. A small
charge is generally made for grinding and mixing. In some associations the
supply business grew from a side line to the major business of the associations.
This development has been common among grain elevator associations in those
states where the farming has changed from grain production to a more diversi-
fled agriculture.
    Ceoperative Gasoline and Oil Associations-The midwest probably de-
veloped the first cooperative gasoline and oil distributing associations.
oil cooperatives were started in both Minnesota and in Wisconsin in 1921,
the movement did not have much growth until about 1926. There are now
probably a thousand or more associations distributing petroleum products
cooperatively in the United States. They are located mainly in the midwest
and far western states. The Cooperative Division of the Farm Credit Admin-
istration reported that 644 associations handling petroleum products had
sales at retail of nearly $82,000,000 in 1934, but these figures are admittedly
    Cooperative oil associations in 1984 handled approximately 5%  of the
total in shipments of gasoline into Wisconsin, 7% into Minnesota and 12%o

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