US Food Industry Research Articles

Comparative performance of cooperatives and investor-owned firms in US food industries

The comparative financial performance of cooperatives and investor-owned firms (IOFs) in the fruit and vegetable processing and the dairy industries was analyzed for the years 1976 through 1987. Contrary to theoretical expectations, the cooperatives in both industries were found to perform as well as or better than the comparable IOFs by profitability, leverage, and interest coverage measures. No clear evidence was found of the hypothesized overinvestment in fixed assets or pronounced moral hazard behavior in cooperatives. The lack of significant differences in profitability between the two types of firms suggests that cooperatives may be following goals similar to IOFs.

A unifying theme for agricultural research

The US agricultural and food industry can be modeled holistically as a diversified conglomerate. When analyzed for current fit to a generalized business life cycle stage, it is found to be in the Decline Phase. Major Decline Phase characteristics are found in market share, return on investment, investment intensity, and capital equipment parameters, among others. Only one strategy option for exit from the Decline Phase for US agri-industry is feasible in the light of world food and US economic need. This is to rebuild and grow to the next productivity plateau. Within the framework of a corporate growth strategy, a central theme for supportive research expressed as a set of achievable generalized objectives for forward-oriented research is needed. The theme must be compatible with ‘corporate’ goals and technical goals envisioned in the light of newly emerging technologies. It must also provide sufficient breadth to accommodate a complex, decentralized research system consisting of private, public, and university performers of research, if any semblance of movement towards common goals is to be afforded. A useful core theme for research is presented and tested for utilitarian value in terms of corporate need, structure of the research system, validity in vertical and horizontal integration of research, and impact on innovative potential. Barriers to research success are identified; suggestions for overcoming them are presented.