CHS updates

Co-op 101: What is a cooperative?

A cooperative and its grain bins with bright blue sky and green grass.

Agricultural cooperatives are owned by farmers and ranchers across rural America.

Oct 07, 2021

October is National Co-op Month and a time to celebrate the cooperative model and the strength it brings to local communities.  

But, do you know what a co-op is? Here we break it down.  

  • What is a cooperative? A cooperative is defined by USDA as a user-owned and controlled business from which benefits are derived and distributed equitably on the basis of use or as a business owned and controlled by the people who use its services.  
  • Who determines policy? The CHS Board is made up of 17 member-owners, elected by the members.  
  • How are profits distributed? The business is operated for a profit; it’s how the profit is divided that makes a co-op unique. Unlike most corporations where the profits are distributed to stockholders, co-ops distribute profits to member-owners on a patronage basis. Patronage is a method of sharing profits among the members. It is based on how much they purchase and the profitability of the co-op.  
  • What kind of co-op system is CHS? CHS is a blended federated and centralized cooperative system. CHS is unique in that along with the federated system of member cooperatives, we also have Country Operations, made up of centralized retail locations dedicated to serve member-owners in their respective geographies. Along with member cooperatives, those member-owners of Country Operations locations vote for board members at the CHS annual meeting or are represented by delegates from their business unit at the annual meeting.  
A chart depicting what kind of co-op system CHS is.

Help us celebrate Co-op Month by following us on Facebook and Twitter and join the conversation using #CoopMonth.