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ABSTRACT: As a result of economies of size, food processors are generally large and few in number. These characteristics put processors at a bargaining advantage over independent farmers. Marketing cooperatives were established to counter the uneven bargaining position of individual farmers. This article investigates the relative bargaining strength of one milk marketing cooperative and several fluid milk processors. The Nash bargaining model can be used to analyze the negotiated price in the Florida fluid milk market which acts like a bilateral monopoly. The milk marketing cooperatives have bargained well with the milk marketing processors. The monthly bargaining strength of the Southeast Dairy Cooperative, Inc. (SDC), exceeds the monthly bargaining strength of the processors in all twelve months, ranging from a low of 0.6664 in January to a high of 0.7831 in September. The monthly average bargaining strength across all months for SDC is 0.7326.
Agricultural and Resource Economics Review 01/2008; 37(2).
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ABSTRACT: A milk marketing cooperative (MMC) was created by Florida dairy farmers to link the primary supply of fluid milk with the derived demand of processors in the vertical market. For any given milk supply, the revenue or return to farmers per unit of milk is the average milk price received by the MMC minus the MMC’s transfer cost. An important task for the MMC is to operate the fluid milk hauling system that optimizes the MMC’s milk transfer cost (routing and scheduling cost) subject to farm and plant schedules. The objective of this study is to determine if it is economically feasible to implement a more efficient routing and scheduling of farm-to-plant milk collection by the MMC.
Journal of Agribusiness. 01/2004; 22(2).
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ABSTRACT: The drive to make the food delivery system more efficient is affecting milk marketing cooperatives. This paper analyzes ways to improve the vertical coordination between the farm and the processing level via a cooperative through a more efficient transportation system.
American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association), 2003 Annual meeting, July 27-30, Montreal, Canada. 01/2003;
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ABSTRACT: Given the approximate bilateral monopoly nature of Florida dairy industry (producers and processors), the monthly projected over-order premiums (i.e., the dollar amount above the Class I price) are determined by the generalized Nash bargaining model through the relevant prices, costs, bargaining power, and risk attitudes. The implications of the results are discussed.
American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association), 2003 Annual meeting, July 27-30, Montreal, Canada. 01/2003;
