An Analysis of Consolidation for the Farm Supply Sector

Changing farm numbers and a changing farm supply industry have prompted many regional cooperatives to consider consolidation of local branches as a means of remaining profitable. A behavioral model has been developed that would permit management of regional cooperatives to consider consolidation of product lines or complete branch closures. This model was used in an empirical analysis of a regional cooperative with an overinvestment in capital assets in its local branches. The results indicated that product line consolidation of major products would result in a greater savings than store closure.