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Evolving Business Arrangements in Local Grain Marketing Cooperatives

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  • Dr. Joan R. Fulton
  • Dr. Michael Popp
  • Carolyn Gray

Abstract

This article explores how local grain marketing cooperatives use such grain marketing services as cash contracts and brokerage services to meet the challenges of today's changing business environment. A review of the changes in the grain marketing industry is presented with particular emphasis on industry concentration and economies of size in transportation. We analyze information obtained from interviews with managers of twenty cooperatives with respect to contractual agreements with farmer/members and informal and formal agreements with other businesses. The results suggest that managers see grain marketing contracts with farmers as profitable in the short and long run. In addition, informal and formal agreements between cooperatives are profitable when transportation can be coordinated, economies of size are captured, and risk can be diversified.

Suggested Citation

  • Dr. Joan R. Fulton & Dr. Michael Popp & Carolyn Gray, 1998. "Evolving Business Arrangements in Local Grain Marketing Cooperatives," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(1), pages 54-68.
    • Handle: RePEc:oup:revage:v:20:y:1998:i:1:p:54-68.
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    File URL: http://hdl.handle.net/10.2307/1349533
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    Cited by:

    1. Unterschultz, James R. & Gurung, Rajendra Kumar, 2002. "New Generation Co-Operatives (Ngc) As A Model For Value-Added Agricultural Processing In Alberta: Applications To Factors Affecting Choice Of Pricing And Payment Practices By Traditional Marketing And," Project Report Series 24045, University of Alberta, Department of Resource Economics and Environmental Sociology.
    2. Franken, Jason & Cook, Michael L., 2022. "Cooperatives’ Role in Farm Risk Management," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322116, Agricultural and Applied Economics Association.
    3. Johnson, D. Demcey & Nilsson, Tomas K.H. & Andersson, Hans, 2001. "Price Pooling and the Gains from Hedging: Application to a Swedish Grain Cooperative," 2001 Annual meeting, August 5-8, Chicago, IL 20554, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Darren Hudson & Cary W. Herndon, 2002. "Factors influencing probability and frequency of participation in merger and partnership activity in agricultural cooperatives," Agribusiness, John Wiley & Sons, Ltd., vol. 18(2), pages 231-246.
    5. Rafat A. M. E. Soboh & Alfons Oude Lansink & Gerard Giesen & Gert van Dijk, 2009. "Performance Measurement of the Agricultural Marketing Cooperatives: The Gap between Theory and Practice," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 446-469.

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