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The Production-Correlation Blind Spot in Grain Cooperative Mergers

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  • Hassanizadeh, Behnam
  • Kenkel, Phil
  • Brorsen, Wade

Abstract

This study analyzes correlations in county-level grain production in Oklahoma and Kansas from 2013 to 2023 to evaluate risk diversification potential in cooperative mergers. Using ordinary least squares, and Bayesian regression, we model how spatial distance, crop composition, adjacency, and production scale affect production correlations. Results show modest county-level heterogeneity, with east–west distance consistently reducing production correlations. Overall, findings suggest that the distance between a cooperative and a potential merger partner is not a reliable predictor of the degree of correlation in grain receipts.

Suggested Citation

  • Hassanizadeh, Behnam & Kenkel, Phil & Brorsen, Wade, 2026. "The Production-Correlation Blind Spot in Grain Cooperative Mergers," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404769, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404769
    DOI: 10.22004/ag.econ.404769
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    References listed on IDEAS

    as
    1. Kenkel, Philip L. & Spence, Becky & Gilbert, Amy, 2003. "Post Merger Financial Performance Of Oklahoma Cooperatives," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35023, Southern Agricultural Economics Association.
    2. Briggeman, Brian & Jacobs, Keri & Kenkel, Phil & McKee, Greg, 2016. "Current Trends in Cooperative Finance," ISU General Staff Papers 3560, Iowa State University, Department of Economics.
    3. Jasper Grashuis, 2023. "Better performance after mergers and acquisitions? The case of US farmer cooperatives," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 83(3), pages 498-510, April.
    4. Brian C. Briggeman & Keri L. Jacobs & Phil Kenkel & Gregory Mckee, 2016. "Current trends in cooperative finance," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 76(3), pages 402-410, September.
    5. Brian C. Briggeman & Keri L. Jacobs & Phil Kenkel & Gregory Mckee, 2016. "Current trends in cooperative finance," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 76(3), pages 402-410, September.
    6. Henehan, Brian M., 2002. "The Decision to Merge: A Case Study of U.S. Dairy Cooperatives," Working Papers 127329, Cornell University, Department of Applied Economics and Management.
    7. Fulton, Joan R. & Popp, Michael P. & Gray, Carolyn, 1996. "Strategic Alliance and Joint Venture Agreements in Grain Marketing Cooperatives," Journal of Cooperatives, NCERA-210, vol. 11, pages 1-15.
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