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A New Approach To Measuring Dairy Cooperative Performance

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  • Ling, K. Charles
  • Liebrand, Carolyn

Abstract

This report prescribes a new method to evaluate and compare operational performance of dairy cooperatives. A cooperative is creating extra value if its net operating margin can more than cover its operating cost, including the opportunity cost of operating capital (the sum of fixed assets and working capital). The extra-value measure can be common-sized by operating capital to create an extra-value index (EVI). The scale-neutral index is an objective measure for comparing operating efficiency between dairy cooperatives and dairy investor-owned firms (IOFs). Using actual data, performance rankings of firms by EVI and by return on equity (ROE) differed somewhat. Dairy cooperatives performed as well as IOFs, based on both EVI and ROE.

Suggested Citation

  • Ling, K. Charles & Liebrand, Carolyn, 1998. "A New Approach To Measuring Dairy Cooperative Performance," Research Reports 280010, United States Department of Agriculture, Rural Development.
    • Handle: RePEc:ags:urdbrr:280010
    DOI: 10.22004/ag.econ.280010
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    Cited by:

    1. Jason R. V. Franken & Michael L. Cook, 2019. "Do Corporate Governance Recommendations Apply to U.S. Agricultural Cooperatives?," Sustainability, MDPI, vol. 11(19), pages 1-16, September.
    2. 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.
    3. Ling, Charles K., 2014. "Performance of the Top 18 Dairy Co-ops, 1992-2012," Research Reports 279799, United States Department of Agriculture, Rural Development.
    4. Theo Benos & Nikos Kalogeras & Martin Wetzels & Ko De Ruyter & Joost M. E. Pennings, 2018. "Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study," Sustainability, MDPI, vol. 10(12), pages 1-38, December.
    5. Franken, Jason R.V. & Cook, Michael L., 2013. "Impact of Board Structure and Process on Cooperative Performance," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149420, Agricultural and Applied Economics Association.
    6. Grashuis, Jasper & Cook, Michael, 2016. "Governance and Performance in the U.S. Agri-Food Industry: A Comparative Study of Firms and Cooperatives," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235676, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Livestock Production/Industries;

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