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Cooperative liquidation under competitive stress

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  • Robin M. Cross
  • Steven T. Buccola
  • Enrique A. Thomann

Abstract

Competitive environments encourage cooperatives to liquidate by distributing equity to their members, often by raising the transfer prices paid for member raw product. We provide a method of detecting when such liquidation activity begins. In the process, we derive the arbitrage-free price bounds of a broad class of forward contracts typical of seasonal and speciality agricultural markets. The bounds are illustrated for the failed Tri-Valley Growers, once the largest fruit/vegetable cooperative in the USA. We show that Tri-Valley began liquidation years before it was detectable through conventional means. Implications are drawn for the expanding competitive pressures accompanying EU enlargement. Oxford University Press and Foundation for the European Review of Agricultural Economics 2009; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Robin M. Cross & Steven T. Buccola & Enrique A. Thomann, 2009. "Cooperative liquidation under competitive stress," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(3), pages 369-393, September.
    • Handle: RePEc:oup:erevae:v:36:y:2009:i:3:p:369-393
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    File URL: http://hdl.handle.net/10.1093/erae/jbp027
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    Cited by:

    1. Anchalee Nuansri & Avishek Datta & Takuji W. Tsusaka & Farhad Zulfiqar, 2024. "Factors influencing the profit and choice of agribusiness for agricultural cooperatives in Thailand," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 751-772, January.
    2. Valentinov, Vladislav & Iliopoulos, Constantine, 2012. "Property Rights Problems in Agricultural Cooperatives: A Heterodox Institutionalist Perspective," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(3).
    3. Damien Rousselière, 2019. "A Flexible Approach to Age Dependence in Organizational Mortality: Comparing the Life Duration for Cooperative and Non-Cooperative Enterprises Using a Bayesian Generalized Additive Discrete Time Survi," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(4), pages 829-855, December.
    4. Rousselière, Samira & Rousselière, Damien & Ramani, Shyama, 2016. "Innovation Led Alliances: Theory and application to the GM Plant Industry," 149th Seminar, October 27-28, 2016, Rennes, France 244949, European Association of Agricultural Economists.
    5. Cadot, Julien & Féral, Arnaud, 2022. "Good Co-ops, Bad Co-ops : Financing Cooperatives in Asymmetric Information," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322550, Agricultural and Applied Economics Association.
    6. Tortia, Ermanno & Valentinov, Vladislav & Iliopoulos, Constantine, 2013. "Agricultural cooperatives," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 2(1), pages 23-36.
    7. Vaida Stulpinienė & Vida Čiulevičienė, 2014. "Agricultural Support Influence On Farm Financial Stability," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 936-946.
    8. repec:ags:aaea22:335976 is not listed on IDEAS
    9. Valentinov, Vladislav & Iliopoulos, Constantine, 2012. "Property Rights Problems in Agricultural Cooperatives: A Heterodox Institutionalist Perspective," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(03), pages 1-9, August.
    10. Cadot, Julien & Alonso Ugaglia, Adeline, 2015. "Cooperative Strategy and Liquidation in the Bordeaux Wine Industry," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205743, Agricultural and Applied Economics Association.

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