The Mississippi Federated Its Purchasing and Marketing Services by J. Warren Mather Agricultural Economist Farmer Cooperative Service FCS Bulletin 2 April 1954 FOREWORD BOUT 25 years ago farmers in upland Mississippi, using the principle prises to purchase production supplies and market farm products. They saw opportunities to make savings and improve quality of supplies in both local retail operations and central or wholesale services. Over the years their cooperatives' total net savings have been about equally divided between the two. Always seeking opportunities to improve operations, these farmers pushed farther back toward the sources of supply. From pooling orders for purchasing in wholesale quantities, they eventually manufactured fertilizers under their own brand. They installed a central processing plant to handle seeds that they were not able to clean or process on their farms or at their local associations' facilities. Then when they found that there were some things they could do best by cooperating with nearby cooperatives in Mississippi and in other States, they joined with them to procure or manufacture such items as nitrogen fertilizers, insecticides, fencing, and roofing. And looking to the future, they are making plans to supply changing needs brought about by more diversified and mechanized farming in the State. This publication endeavors to show how Mississippi farmers have helped themselves through cooperative effort, and to serve as a guide for other farmers in the South in improving their economic status. Purpose and method of the study.... Changes in agriculture and farm supply costs. Early developments of Mississippi Federated Cooperatives (A. A. L.) and its Warehousing and trucking operations. Experience with retail branches.... Volume and operating results. _ SUMMARY AND CONCLUSIONS HIS bulletin covers in detail operations of Mississippi Federated Cooperatives (A. A. L.), Jackson, and 40 of its 43 member local cooperatives. It analyzes the present purchasing and marketing operations and related services of the system, and compares progress made in serving farmers with its status in 1935-36 when the Cooperative Research and Service Division, now the Farmer Cooperative Service, made an earlier report on its activities. The publication traces how Mississippicooperative leaders pioneered in building an off-the-farm business system adapted to the upland area of the State-comprised of local cooperatives democratically controlled yet financed and supervised by their State association. It indicates how these cooperatives have coordinated retailing, wholesaling, and manufacturing of basic production supplies; and have been overcoming various handicaps and problems to successfully serve all types of farmers on an equitable basis. After listing benefits that farmers obtained through these cooperatives, it offers suggestions for improving their operations and services to members. It looks first at the State association and then analyzes the locals. The State organization, referred to as M. F. C., purchases at wholesale and manufactures farm supplies required by its 43 member and 28 nonmember associations. It also markets cotton for some 9,000 farmer members of these locals and for 2,500 growers located near Jackson and in areas without member associations. Farm supply volume for the year ended May 31, 1953, totaled $7.1 million, plus $1 million of feed on a brokerage brokerage basis, compared with only $570,000 in the 1935-36 year. Net margins were 3.9 percent of volume, with three-fourths of these made by its fertilizer plants. Throughout its history, M. F. C. has concentrated on basic production supplies needed by farmers in its area. In 1952-53 fertilizer constituted 58.5 percent of its supply volume; seed, 22.5 percent; miscellaneous supplies, 10.5 percent, and feed, 8.5 percent, exclusive of that handled on a commission basis. M. F. C.'s sales of cotton have ranged from $1.3 million to $6.3 million a year fluctuating with the amount of cotton going into the Government loan program. Facilities to provide these services have grown from virtually none in 1936 to $1 million at cost value by May 1953. M. F. C. now operates four fertilizer plants, a seed processing plant, two warehouses, and a general office building. It also has about a third of a million dollars invested in other regional cooperatives through which it obtains supplies. |