Pre- and post-merger characteristics of agricultural cooperative reorganizations and implications for planning, financing and growth

Abstract

Farmer cooperative comprise an important segment of the agricultural economy of the United States. Over 7,700 associations handle annual sale volumes exceeding $20 billion in total, accounting for about 30 percent of total farm marketings and almost 20 percent of farm supplies purchased. While cooperative business volume continues to grow, the number of associations handling its continues to decline, due in substantial part to combination of organizations-involving merger, acquisition, and consolidation. During 1960-69, a period of extremely heavy reorganization activity in all sectors of the economy, 787 combinations of cooperative organizations were identified. Very little economic analysis has been concerned with this recent surge of cooperative reorganizations. The study was structured to provide such analytic coverage by focusing both on general characteristics of overall cooperative reorganization activity and on more detailed characteristics involving only the active reorganization operating at an initial reorganization stage. For the overall analysis, reorganized cooperatives were classified into 4 groups based on their 1974 operating status: (1) active, initial level reorganizations; (2) active, post-initial level reorganizations; (3) inactive, initial level terminations; and (4) inactive, post-initial level terminations. Measures presented in this phase of the study were derived from secondary data..