Using Unallocated Retained Earnings to Finance Agricultural Cooperatives

Jeffrey S. Royer, University of Nebraska–Lincoln

Document Type Article

Copyright 2017 University of Nebraska.

Abstract

Historically, U.S. agricultural cooperatives have relied primarily on retained patronage refunds for accumulating equity capital. Typically, a cooperative returns its net earnings to members as a combination of cash and noncash patronage refund allocations. Members maintain ownership of the noncash allocations, which provide equity until the cooperative eventually redeems them in cash when they are replaced by future allocations.