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Modeling Member Responses To The Farmer Owned Cooperative'S Alternative Capital Management Strategies

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  • Diaz-Hermelo, Francisco
  • Gray, Allan W.
  • Smith, Edward G.

Abstract

Research directed toward determining the optimal capital structure for agricultural cooperatives could provide solutions to debt-related financial stress problems (Moller, Featherstone, and Barton, 1996). Assessing the cooperatives' member needs, proper capitalization, and economies of scale are among the critical areas that need attention (Torgerson, 1992). This research dynamically models the capitalization of agricultural cooperatives with the ultimate goal of providing information that helps reduce the cooperatives financial stress and adequately addresses the member-owner's needs. Specifically, this research explores alternative equity management strategies for farmer-owned cooperatives. Unlike other equity management studies, this research focuses on the transition from current equity management practices to equity management practices that improve the cooperative's control over capitalization of assets, maintain competitiveness, and maximize the return to the individual farmer-owners in a risky economic and financial environment.

Suggested Citation

  • Diaz-Hermelo, Francisco & Gray, Allan W. & Smith, Edward G., 2001. "Modeling Member Responses To The Farmer Owned Cooperative'S Alternative Capital Management Strategies," 2001 Annual meeting, August 5-8, Chicago, IL 20546, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20546
    DOI: 10.22004/ag.econ.20546
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    References listed on IDEAS

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    1. Poray, Michael C. & Ginder, Roger G., 1999. "Comparing Alternative Closed Swine Production Cooperatives: Adding Value to Corn Under Uncertainty," Journal of Cooperatives, NCERA-210, vol. 14, pages 1-21.
    2. Charles R. Knoeber & David L. Baumer, 1983. "Understanding Retained Patronage Refunds in Agricultural Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 30-37.
    3. Moller, Lynn G. & Featherstone, Allen M. & Barton, David G., 1996. "Sources of Financial Stress in Agricultural Cooperatives," Journal of Cooperatives, NCERA-210, vol. 11, pages 1-14.
    4. Barton, David G. & Parcell, Joseph L. & Featherstone, Allen M., 1997. "Optimal Capital Structure in Centralized Agricultural Cooperatives," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35809, Western Agricultural Economics Association.
    5. Poray, Michael Charles, 1997. "Economic and financial analysis of large scale closed cooperative swine production under uncertainty in Iowa," ISU General Staff Papers 1997010108000018182, Iowa State University, Department of Economics.
    6. Poray, Michael C. & Ginder, Roger, 1999. "Comparing Alternative Closed Swine Production Cooperatives: Adding Value to Corn Under Uncertainty," Staff General Research Papers Archive 1556, Iowa State University, Department of Economics.
    7. James G. Beierlein & Lee F. Schrader, 1978. "Patron Valuation of a Farmer Cooperative under Alternative Finance Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(4), pages 636-641.
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    Cited by:

    1. Zhang, Tianwei & Mallory, Mindy L., 2010. "Patronage Refunds Paying Decision of Farm Credit System Associations: A Logit Model," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61756, Agricultural and Applied Economics Association.

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