Agricultural Cooperatives: Economics, Opportunities and Structure in a New Era of Food, Fiber and Fuel

Phil Kenkel
Bill Fitzwater Cooperative Chair, Oklahoma State University
Cooperative businesses are an important part of the U.S. economy and are particularly prevalent in the agricultural sector. Cooperatives operate under a business model that generates unique challenges in finance management, governance, strategy and communication. These unique challenges and the prevalence of cooperatives in U.S. agriculture have encouraged research and education efforts by agricultural economists since the early 1900’s. Cooperatives were included as a part of the mission of the Cooperative Extension Service in 1926, and the USDA has maintained research and statistical staff focusing on cooperatives for over 50 years. A CSREES Regional Research and Extension committee for cooperatives has been active since 1993, making it one of the longest running such committees in the United States.
There have also been a number of efforts to identify critical issues and success factors for agricultural cooperatives. Panels of experts have been compiled in every decade since the 1970s and have helped the academic community develop research and outreach programs for cooperative firms. The most recent effort, prior to the current project, was summarized in 2002 Rural Business Cooperative Service report, “Agricultural Cooperatives in the 21st Century.”
In 2011 the Council for Food, Agricultural and Resource Economics initiated the most recent effort to explore the critical issues facing U.S. agricultural cooperatives. The project was managed by Dr. Phil Kenkel, Bill Fitzwater Cooperative Chair at Oklahoma State University. Members of the eXtension Cooperative Community of Practice and the NCERA-210 Research Committee on Cooperatives were also heavily involved. The goal of the project was to identify future research needs on the economics of cooperatives by developing education and professional discussions among the agricultural community served by cooperatives, academic audiences, and cooperative members and managers.
A panel of experts consisting of cooperative leaders, USDA representatives and academic specialists was identified. The cooperative leaders represented a diverse spectrum of business areas including raisins, oranges, grain, farm supply, dairy, bio-energy, farm credit and local foods. The issues were identified through a two-stage modified Delphi survey process and a face-to-face focus panel discussion. The first stage was an open-ended survey in which the panel identified and discussed critical issues. In the second stage the panel members rated the importance of the major issues identified in the stage. Twenty-five cooperative leaders received the survey; 18 responded to the first stage, and 19 responded to the second stage. The panel was then convened in Washington, D.C. on August 4, 2011 to discuss and expand on the issues. The themes of the panel discussion included: (a) Finance, (b) Strategy, (c) Communicating the Value Package, (d) Governance and (e) New Cooperative Development. Forty-five experts took part in the August 4 discussion.
Following up on the survey results and panel discussion, cooperative researchers developed a series of articles focusing on the critical issues and success factors. They were published in Choices magazine. The papers can be accessed at the links below or viewed at: In the first four months, the articles were viewed over 2,600 times.
A national webinar on “Communicating the Cooperative Value Package” was coordinated by the eXtension Cooperative Community of Practice. Individuals in 75 separate sites across the continental United States, Hawaii and Europe participated in the webinar. The webinar can be viewed here at: The final component of the project was a pre-conference on Critical Issues Facing Cooperatives held in conjunction with the Farmers Cooperative Conference in Minneapolis, Minnesota on November 3, 2011. At the conference, representatives of the expert panel re-convened and expanded the discussion with a diverse audience of over 80 industry professionals and researchers.