October is co-op month- North Dakota cooperatives contribute to economy

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Cooperative leaders from across the state joined Gov. Jack Dalrymple in Bismarck as he signed a proclamation, deeming October as “Co-op Month.”

The theme for this year’s co-op month is “cooperative enterprises build a better world” and underscores the importance of the impact on local communities.

“Co-ops can be a key part of building a resilient local economy and can be trusted to benefit people in difficult times,” says Paul Hazen, president of the National Cooperative Business Association, which spearheads the annual observation of Co-op Month. He adds that Co-op Month 2011 is also a chance to celebrate the co-op business model’s contribution to the economic recovery.

“The more people understand what co-ops are all about, the more likely they are to do business with, or even join, a cooperative,” says Dallas Tonsager, Under Secretary for USDA Rural Development. “Co-ops have a great story to tell, and we all have a role in helping to tell it.”

The cooperative business model is alive and well in North Dakota. “Cooperatives are major economic engines in our state,” Dalrymple said at the ceremonial signing of the proclamation. “They provide vital products and services in communities large and small across the state — ranging from utilities, to insurance, to financial services, to farm supply and marketing.”

An economic impact study was recently conducted by the Quentin Burdick Center for Cooperatives at North Dakota State University. Director Gregory McKee, explained, “Cooperatives are a vital component of the North Dakota economy.  Owned by their customers or by privately-held firms, cooperatives provide a variety of goods and services to North Dakota, including electricity, telecommunications, farm inputs, and other services. Based on data provided by the North Dakota Secretary of State, 332 businesses operating in North Dakota identified themselves as cooperatives in 2010.”

The following data summarizes the economic impact of a sample of 124 cooperatives headquartered in North Dakota. In 2010, the North Dakota operations of 18 electricity cooperatives, 48 financial cooperatives, and 58 farm-related cooperatives generated $1.91 billion of value. This led to business activity for input suppliers and purchases by employee households of $1.14 billion. Hence, in 2010 these 124 cooperatives generated or induced a total economic value of $3.1 billion in the North Dakota economy.

Besides their economic output, cooperatives provide jobs, wages and tax revenue to the state. After the cost of goods sold, the principal expenditure of the cooperatives in North Dakota is employee compensation. The 124 cooperatives surveyed employed approximately 5,300 people in North Dakota in 2010, earning approximately $421 million in wages and benefits. The output generated by cooperatives and the expenses generated by cooperative employee household spending generated an additional 9,200 full time jobs and $337 million in wages and benefits in the North Dakota economy. Together, these activities led to corporate, payroll and personal taxes within the state of $215 million. It should be noted that as more data is received, these initial figures could change.

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