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An Examination Of New Generation Cooperatives In The Upper Midwest: Successes, Failures, And Limitations

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  • Jasper GRASHUIS
  • Michael COOK

Abstract

A new organizational form, the new generation cooperative (NGC), emerged in the United States during the 1990s as farm producers came together to collectively add value to raw farm commodities. As compared to the traditional cooperative, the NGC facilitates a strong market orientation by defining membership and requiring high supply and equity capital commitments. Approximately 100 such value‐added ventures formed during a period called ‘cooperative fever’, but public and producer interest dissipated in the 2000s. With secondary data collected from print media publications, we conclude that many of the original NGCs exited by means of bankruptcy or liquidation because of challenges common to most business organizations. However, other failures and conversions of large, successful NGCs also indicate an inherent equity and liquidity constraint, suggesting a limited ability of the organizational form to drive complex and capital‐intensive value‐added ventures. We conclude by raising possible conditions for the future viability of producer‐owned business organizations in the value‐added agri‐food industry.

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  • Jasper GRASHUIS & Michael COOK, 2018. "An Examination Of New Generation Cooperatives In The Upper Midwest: Successes, Failures, And Limitations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 623-644, December.
    • Handle: RePEc:bla:annpce:v:89:y:2018:i:4:p:623-644
    DOI: 10.1111/apce.12211
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    Cited by:

    1. Jasper Grashuis, 2018. "An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments," Sustainability, MDPI, vol. 10(3), pages 1-15, February.
    2. Jasper Grashuis, 2018. "Joint ownership by farmers and investors in the agri-food industry: an exploratory study of the limited cooperative association," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-14, December.
    3. Manouchehrabadi, Behrang & Letizia, Paolo & Hendrikse, George, 2021. "Governance of collective entrepreneurship," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 370-389.
    4. Dong, Hao & Dacre, Nicholas & Bailey, Adrian, 2021. "Sustainable Agile Project Management in Complex Agriculture Projects: An Institutional Theory Perspective," SocArXiv v4je2, Center for Open Science.
    5. Jasper Grashuis & Theodoros Skevas, 2023. "What is the benefit of membership in farm producer organizations? The case of coffee producers in Peru," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 423-443, June.
    6. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    7. Bogetoft, Peter, 2021. "How upstream cooperatives limit downstream holdups," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 156-168.
    8. Jared Carlberg, 2020. "Vulnerabilities and Benefits of Mega-Scale Agri-Food Processing Facilities in Canada," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 13(20), December.
    9. Timothy Waring & Taylor Lange & Sujan Chakraborty, 2022. "Institutional adaptation in the evolution of the ‘co-operative principles’," Journal of Evolutionary Economics, Springer, vol. 32(1), pages 333-365, January.

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