These have been tough times for small American farmers. Farmland Industries, the nation's largest farmer-owned co-op, with annual revenues topping $12 billion, filed for bankruptcy protection last year. Today it's creeping toward total dissolution.
What happened? Well, some blame mismanagement, overexpansion, a large debt load, and/or a struggling fertilizer business. What does it mean? For one thing, many small farmers have lost a lot of bargaining power. Think of the big distribution outlets, such as Wal-Mart
Big firms such as Wal-Mart tend to deal with other big firms like ConAgra
As Farmland approaches liquidation, farmers will be losing some $700 million-plus invested in the co-op. Meanwhile, privately held Cargill and Koch Industries acquired its fertilizer business, while Smithfield Foods
These acquisitions are drawing attention, due to the threat of decreased competition they present. Already, several Senators have asked the Department of Justice to look into how consumers and farmers would be affected by Smithfield buying Farmland's pork business.
If you're looking for something encouraging in all this, know that some sizable co-ops do still exist, such as Dairy Farmers of America, Sunkist, Florida's Natural Growers, Ocean Spray, Land'o'Lakes, and CHS (Cenex Harvest States Cooperatives).
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