The Producer Cooperative as Monitored Credit? The Case of West Liberty Foods

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The West Liberty Foods turkey cooperative formed in 1996 to purchase the assets and assume operations of Louis Rich Foods. Based on field interviews with grower members and company management, we describe changes in the economic relationship between growers and the company that resulted from the purchase. We argue that many of the observed changes are consistent with a financial-contracting view of the cooperative firm where the bundling of input-supply and board activities generates a reduction in agency rents that compensates for the organizational deadweight loss traditionally associated with cooperative governance.

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http://hdl.handle.net/123456789/558182

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https://ageconsearch.umn.edu/record/56890/files/HuethWLF.pdf

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University of Minnesota