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Economic and financial analysis of large scale closed cooperative swine production under uncertainty in Iowa

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  • Poray, Michael Charles

Abstract

This research evaluates the opportunities for small grain farmers in Iowa to organize a joint large scale swine production operation. Different business organizational structures' legal and tax implications are examined for a joint large scale production operation. Based on the suitability from reviewing current the legal and tax regulations, the closed (defined membership) cooperative was selected as the organizational business structure for the proposed group of small grain farmers. The returns from establishing closed cooperatives owned by grain producers to produce hogs in Iowa are evaluate. Using a computer simulated production model incorporating both biological and price factors, the uncertainty of production and the market environment were modeled. Using a minimization of total absolute deviations (MOTAD) model, an efficient Expected Income-Mean Absolute Income Deviation (E-A) frontier is developed for the proposed closed swine production cooperatives.

Suggested Citation

  • 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.
    • Handle: RePEc:isu:genstf:1997010108000018182
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    References listed on IDEAS

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    1. Diaz-Hermelo, Francisco & Gray, Allan W. & Smith, Edward G., 2000. "Modeling Member Responses to the Farmer Owned Cooperative's Alternative Capital Management Strategies," 2000 Annual Meeting, December 12-13 31813, NCERA-194 Research on Cooperatives.

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