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Agricultural Cooperatives and Market Performance in Food Manufacturing

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  • Rogers, Richard T.
  • Petraglia, Lisa M.

Abstract

Support for the cooperative yardstick hypothesis was found using a standard structure-performance model that was extended to include a cooperative market share variable and was estimated with a large cross-section of food manufacturing markets. Market concentration and advertising intensity were positively related to price-cost margins. In addition, the aggregate market share of the one hundred largest agricultural marketing cooperatives was inversely related to price-cost margins. The magnitude of the effect was largest in the more concentrated markets. This suggests that. where cooperatives have vertically extended themselves into food processing. more competitive outcomes are found even in highly concentrated markets.

Suggested Citation

  • Rogers, Richard T. & Petraglia, Lisa M., 1993. "Agricultural Cooperatives and Market Performance in Food Manufacturing," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 9, pages 1-12.
    • Handle: RePEc:ags:joagco:46399
    DOI: 10.22004/ag.econ.46399
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    References listed on IDEAS

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    1. Robert L. Wills, 1985. "Evaluating Price Enhancement by Processing Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(2), pages 183-192.
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    4. Sexton, Richard J. & Iskow, Julie, 1993. "What Do We Know About the Economic Efficiency of Cooperatives: An Evaluative Survey," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 8, pages 1-13.
    5. Condon, Andrew M. & Cotterill, Ronald W. & Rhodes, V. James & Shaffer, James D. & Staatz, John M., 1987. "Cooperative Theory: New Approaches," Service Reports (SR) 280614, United States Department of Agriculture, Rural Development.
    6. Jesse, Edward V. & Johnson, Aaron C. Jr, 1980. "Marketing Cooperatives and Undue Price Enhancement: A Theoretical Perspective," Working Papers 202953, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    7. Rogers, Richard T. & Marion, Bruce W., 1990. "Food Manufacturing Activities of the Largest Agricultural Cooperatives: Market Power and Strategic Behavior Implications," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 5, pages 1-15.
    8. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
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    Cited by:

    1. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 3847, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. Unknown, 2005. "New Directions In Global Food Markets," Agricultural Information Bulletins 33751, United States Department of Agriculture, Economic Research Service.
    3. Qiao Liang & Xinxin Wang, 2020. "Cooperatives as competitive yardstick in the hog industry?—Evidence from China," Agribusiness, John Wiley & Sons, Ltd., vol. 36(1), pages 127-145, January.
    4. Milford Anna B., 2012. "The Pro-Competitive Effect of Coffee Cooperatives in Chiapas, Mexico," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-29, March.
    5. Edelman, Mark & Dunn, John R., 2009. "Cooperatives: A Competitive Yardstick for Health Care," Staff General Research Papers Archive 31470, Iowa State University, Department of Economics.

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