One of our main objectives is to maximize patronage dividends to our growers. Patronage dividends are limited to profits derived from the sale of our growers’ crop and consumer products in which it is the main ingredient. In contrast to normal corporate dividends, the Cooperative can deduct patronage dividends from state and federal tax returns. We return eligible profits back to our growers so they can reinvest in their farming operations with money that would otherwise be paid in taxes.
Since 2010, USTC has declared $46.2 million in dividends and paid out $24.3 million in cash. Returning profits back to our members is a key factor in ensuring the sustainability of member growers and the Cooperative. No other leaf buyer in the U.S. has returned those kinds of profits to its growers. Patronage can have a significant impact on a grower’s profitability without adding to the customers’ cost of tobacco. Growers can earn an estimated 25% or more in profit for each pound they sell to the Cooperative. Offering patronage to our growers is a major factor in helping USTC secure the best leaf in the market at a fair price. Our unique grower-focused model is what has made USTC the preferred grower contract in the market.