Evaluation of Factors Affecting the Choice of Pricing and Payment Practices by Traditional Marketing and New Generation Cooperatives

Questionnaires were mailed to cooperatives in the mid-western states of the U.S. and selected provinces in Canada to evaluate the impact of type of organization and level of competition on the choice of cooperative pricing and payment methods. Traditional marketing cooperatives are more likely to choose the “spot market cash price” for payment to members and are more responsive to increased competition in commodity markets. New Generation Cooperatives are more likely to choose a “pooled” price, and appeared indifferent to short run increased competition in commodity markets. The type of cooperative has an impact on the pricing and payment methods used to pay for commodities supplied by members of the cooperative. The reasons for these differences may be rooted in the competitive pressures which these cooperatives face, the degree of processing that they undertake, and the goals of their membership.