Grain Marketing Cooperatives' Adjustments to Farm Programs

A personal interview survey of 87 grain marketing cooperatives regarding the impact of changes in government programs and planned responses to the dilemma of excess capacity and loss of government storage income and related factors is reported. Government storage payment's impact on financial performance was ranked 77% more important than the second (other government programs) of 7 factors (e.g., interest rates). Government storage accounted for 20% of their net income. They acquired an average of 800,000 bu. of storage capacity in response to government programs. PIK and roll increased annual income an average of $39,000 in 1986-87. Participation in CCC weekly auctions averaged 51% and in catalog sales 87%. Most managers felt that government programs did not influence merchandising methods. Two of the major alternatives managers selected to enhance income (increase margins and the number of patrons) are unrealistic because of excess capacity, competitive pressures, and declining producer numbers. Becoming a low-cost provider, developing a market niche, and exploiting potential economies from mergers are the recommended strategies for survival. Strategies individual cooperatives selected should be adapted to each unique situation. Key Words: Cooperatives, marketing strategies, farm programs, grain marketing, country elevators


Issue Date:
1992
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/23156
PURL Identifier:
http://purl.umn.edu/23156
Total Pages:
80
Series Statement:
Agricultural Economics Report No. 291




 Record created 2017-04-01, last modified 2018-01-22

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