A New Approach To Measuring Dairy Cooperative Performance

K. Charles Ling and Carolyn Liebrand

No 280010, Research Reports from United States Department of Agriculture, Rural Development

Abstract: This report prescribes a new method to evaluate and compare operational performance of dairy cooperatives. A cooperative is creating extra value if its net operating margin can more than cover its operating cost, including the opportunity cost of operating capital (the sum of fixed assets and working capital). The extra-value measure can be common-sized by operating capital to create an extra-value index (EVI). The scale-neutral index is an objective measure for comparing operating efficiency between dairy cooperatives and dairy investor-owned firms (IOFs). Using actual data, performance rankings of firms by EVI and by return on equity (ROE) differed somewhat. Dairy cooperatives performed as well as IOFs, based on both EVI and ROE.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 29
Date: 1998-09
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:urdbrr:280010

DOI: 10.22004/ag.econ.280010

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