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Valuation of Transferable Delivery Rights for Marketing Cooperatives

Author

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  • Moore, Charles V.
  • Noel, Jay E.

Abstract

Delivery rights to a cooperative's marketing pool can take on a value independent of the members' equity share under certain conditions. Based on anecdotal information, transferable delivery rights become valuable when the pool is fixed in size (closed), members are protected from exploitation of quasi economic rents, and have an assured "home" for their production. The greater the potential buyers' aversion to risk, the higher the value of the delivery right. The right has additional value if the cooperative generates a premium per unit return due to product differentiation and market power. Cooperatives competing with investor-owned firms in less than purely competitive markets must be able to pay equal net returns to members if they are to survive.

Suggested Citation

  • Moore, Charles V. & Noel, Jay E., 1995. "Valuation of Transferable Delivery Rights for Marketing Cooperatives," Journal of Cooperatives, NCERA-210, vol. 10, pages 1-17.
    • Handle: RePEc:ags:jlcoop:46183
    DOI: 10.22004/ag.econ.46183
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    Cited by:

    1. Noel, Jay E. & Ahern, James & Schaffner, David J. & Johnson, Jill & Muelrath, Kristina & Schroeder, Kyle, 2002. "The Economic Feasibility of Forming a California Wheat Growers’ Cooperative," Research Reports 143136, University of California, Davis, Center for Cooperatives.
    2. Srinivasan, R., 2011. "The Cost of Risky Debt in Cooperatives," Journal of Cooperatives, NCERA-210, vol. 25, pages 1-16.

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    Keywords

    Agribusiness; Marketing;

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