FAQ - GENERAL
Our mission is "To supply goods and service to patrons (on a cooperative basis) in a manner which enhances agriculture and the communities we serve and its members."
A cooperative is a company that is owned and controlled by its customers and operated for their benefit. (This compares with a private company that is stockholder owned and controlled.) Customers of Federated Co-ops gain ownership by doing business with the company and earning patronage. Patronage—the profit earned on the customers' business—is paid out partly in cash and partly in equities retained to operate the company. These equities are returned to the customer at a later date, as provided in the co-op's bylaws. Members elect the board of directors, who then hires the general manager of the cooperative.
You need not be a farmer to buy from Federated Co-ops or to become a voting member. Just open an account and begin doing business at any of our locations.
Several co-ops merged over a period of years to form Federated Co-ops. These were largely farmer co-ops. Today, however, there are many non-farmers living and working in our market area, which was once rural farmland. Our customers are white- and blue-collar workers, and town and county residents, as well as farmers. As a cooperative, our mission is to supply goods and services to all of our customers. As residential customers moved into our rural farmland, we adjusted our service to meet the needs of these patrons as well.
Along with three other co-ops and Land O’Lakes® Purina Feeds, Federated owns 18% of Munson Lakes Nutrition (MLN), a feed manufacturer at Howard Lake, MN. MLN supplies bulk feeds to our customers who are livestock producers and bagged feeds to Federated Co-ops’ Country Stores. In addition to the above, Federated Co-ops has marketing relationships with Askov-Finlayson Co-op (Askov, MN) in propane, with Centra Sota Cooperative (Buffalo, MN) in agronomy, and with Sunrise Ag Co-op (Buckman, MN) in propane.
Big compared to what? We’re not as big as the nationally owned propane companies with which we compete, and we’re not as small as some neighboring agronomy companies that have difficulty affording the technology and expertise to serve their farmer-members. Members of Federated Co-ops currently enjoy the best to two worlds. The co-op continues to maintain a local presence in the communities it serves, giving customers a face to go with the voice over the phone. And because it’s a cooperative, our members have a voice in how the company is operated. At the same time, through planned growth, Federated Co-ops has achieved an economy of scale that allows it to operate efficiently, to purchase in quantity, and to absorb some risk for its members. As an example, we own and operate a rail terminal at Cambridge, MN, which allows us to bring in and store propane by tank car, when pipelines are out. Because of our size, we can employ experienced staff to maintain a safety program that benefits both our customers and our employees. We can operate a truck fleet necessary to bring propane to our bulk facilities from a distance during times of short supply. We can also afford specialized equipment and technology required to better serve both farm and non-farm customers. Finally, our current size allows us to be profitable and maintain financial strength, which is necessary to continue serving our members.
It begins with those words because the essence of our business is our employees serving their friends and neighbors—the people who own this company. Our employees have more than a business relationship with our customers. Because we live in close proximity, our contact is not limited to business. Our families participate in school, church, and community events together. We genuinely care about each other and take personal interest in each other’s lives. In an impersonal world of big-box stores, this sets Federated Co-ops apart.
They think of quality and good value. Rather than supplying low-grade, economy products and services, Federated Co-ops presents its customers with trusted brands that are safe and durable, delivering good value for their money. That’s why the second part of our Brand Vision is “Products you Trust.” But, quality is more than well-made products. It is also consistent employment of people with the knowledge and expertise to tell our customers how to get the best results from these products. Turnover rates among Federated Co-ops employee groups are well below industry averages, assuring a continuity of customer relationships that is priceless.
Since we’re locally owned by the people who do business with us, we’re not going to pick up and leave as soon as the economic winds change. Furthermore, Federated Co-ops is financially strong. In today’s economic turmoil, that’s reassuring to our customers who are now pre-paying farm inputs and energy products. Their money is safe with us. There is great security in knowing this company will be able to meet the needs of its customers because we have a firm financial foundation and because our purpose is to serve our customer-owners for as long as they need us. That’s the origin of the third part of our Brand Vision, which is also our Brand Promise: “Value for Life.”
Training, training, training. With our size, we’re large enough to have a safety director to oversee training and make sure we are consistent. With our low turnover, we train people and they stay with us. They have the knowledge they need, on a long-term basis, to handle the products we provide. Even with training, new employees may not have the experience necessary to handle these products safely. Long-term, well-trained, and seasoned employees are the safest at handling dangerous chemicals. Federated Co-ops nurtures a culture of safety and has committed to spending money for safety equipment, safety training for our employees, and hiring the personnel necessary see that our training and safety policies are carried out.
The three tenets of our Brand Vision set us apart: People who care. Products you trust. Value for life. But the biggest and most important of those is our high-quality employee group. They’re local, they’re knowledgeable, and many of them have worked for Federated Co-ops for years. They really do care, because the customers they serve are their friends and neighbors. In addition to the tenants of our Brand Vision, our financial stability sets Federated Co-ops apart from the competition. This, and the fact that we are a cooperative, means we should be around to serve our customers-owners for many years. We’re not driven exclusively by the bottom line and apt to leave the area or exit the businesses we operate as soon as economic winds change. We’re here to meet the needs of our customers, while staying profitable so we can continue to serve.
We have roots in the early 1900's, when farmers and residents of rural Minnesota formed cooperatively owned companies to market their dairy products and assure themselves a reliable source of feed and fuel as well as groceries, machinery, lumber, trucking, and even funeral services. At least 24 local cooperatives (one founded as early as 1907) joined together in several mergers over the years. A final merger in 2001 formed Federated Co-ops, Inc., headquartered in Princeton, MN. CAP Trico Oil and Propane of Cloquet, MN has joined this union in 2007, making Federated Co-ops, Inc. the 18th largest U.S. propane supplier. Below is a list of co-ops that merged over the years, eventually forming Federated Co-ops, Inc:
- Farmers Co-op Creamery, Milaca, MN (later renamed Mille Lacs Ag Service and headquartered at Pease, MN)
- Farmers Cooperative Association, Princeton, MN
- Kanabec County Cooperative Oil Association, Mora, MN
- Ogilvie Co-op Exchange
- Hinckley Co-op Feed Mill
- C-A-P Cooperative Oil Association (later known as C.A.P. Propane Plus, Kettle River, MN)
- Trico Cooperative Oil Association (later known as Trico Oil & Propane Cooperative)
- Mille Lacs County Cooperative Oil Association
- Pine County Cooperative Association, Pine City, MN
- Pine County Farmers Exchange
- Braham Co-op
- Rush City Co-op
- Hinckley Co-op Stores
- Federated Co-ops, Inc of East Central Minnesota (later called Federated Propane)
- Isanti County Cooperative Association
- Princeton Cooperative Association, Princeton, MN
- Isle Cooperative Oil Association, Isle, MN
- Chisago Lakes Cooperative
- Central Rivers Cooperative
- Polk County Co-op, Osceola, WI
- C.A.P.-Trico Oil & Propane Cooperative, Cloquet, MN
- Wright County Co-op, St. Michael, MN
- Benton County Co-op, Foley, MN
FAQ - PATRONAGE
When you open your account you are required to complete the customer information and the Substitute W-9/Patronage Consent form. We must have your Social Security number to pay Patronage so it can be reported correctly on the 1099PATR form to the IRS.
Federated Co-ops is a Cooperative, so when profits are earned they are paid back to the customers who have done business in the prior year.
You may not receive a payment every year, the rate varies from year to year based upon the Cooperative's earnings, the minimum check amount, and the amount of your purchases.
Patronage equity is non interest bearing.
The IRS requires the 1099PATR to show the total refund for the year regardless of the cash amount paid. You should check with your Tax Preparer to determine if the refund is taxable in your situation.
All equity earned remains in your name until you reach the Board's designated retirement age of 70, you must make a request to the Board when you reach the required age. Be sure the Cooperative always has your current mailing address to ensure all records are up to date.
Under the Board's current policy all equity earned is paid out to the Estate.
"Total Sales": The dollar amount you spent for the previous Calendar year.
"Calculated Refund": This is the Total refund based on your Total Sales(purchases).
"Equity": This is the equity amount being added to your Equity account.
"New Equity Balance": This the total amount in your Equity account, for all years.
"Cash Refund": This is the amount of Cash paid.
"Less FWT": If your Social Security number was not provided this is the Federal Withholding.
"Check Amount": This is the amount the check is for.
It is based upon the yearly earnings of the Cooperative, and the amount that you purchased during the previous calendar year.