Emerson M. Babb

Growth of large cooperative and proprietary firms in the US food sector

Growth of sales and assets of large cooperative and proprietary firms in five food industries from 1975 to 1980 were analyzed. Models of firm growth were estimated using data from 32 cooperatives and 35 proprietary corporations. The seven factors included in the model affect the growth of cooperatives and proprietary firms similarly but fail to account for the more rapid growth achieved by cooperatives during the period studied.

An Application of Equilibrium Size of Plant Analysis to Fluid Milk Processing and Distribution

This article reports the results of an empirical study in which a model for equilibrium size of marketing firm in a spatial market is used. This model has received extensive treatment in this JOURNAL, particularly from a theoretical standpoint. The model is applied to the processing and distribution of packaged fluid milk. Solution of the model results in determination of size of plant associated with minimum average processing and distribution costs. Results of the study indicated that where packaged milk is distributed in semitrailers, in most situations increases in distribution cost as plant size is expanded do not offset decreases in processing cost up to the 134,000 quart per day plant. While total average cost declines within this range of plant sizes, most of the economies of size are realized by the 50,000 quart per day level.

Critical Choices Relating to the Economic Structure of the Farming Sector: Discussion

In the coming years, important decisions about the structure of the farming sector will be made. These decisions, including making no change in current policies, will be based on facts or perceptions about the consequences flowing from alternative structures. The challenge to our profession, and to other professions concerned with agriculture, will be to provide information needed for decision making on a timely basis. We will be called upon to interpret our stock of research findings and to fill important gaps in our knowledge about farm structure relationships. The paper by Flinn and Buttel contains an excellent summary of the work by sociologists on farm structure and provides a basis for identifying the research that will be needed. Because of its scope, I will direct most of my comments to that paper. The Flinn-Buttel paper is provocative and grapples with major issues in the farm structure debate. The authors indicate that sociologists would be divided on their interpretations of research findings and implications. Economists likewise will be divided.

Projecting Performance of Farm Supply Retailing Firms Using Simulation Techniques

Previous research used experimental gaming in a laboratory setting to test hypotheses about business behavior of firm managers as subjects (Babb and Bohl 1974). Subject managers were from midwestern farm supply retail outlets. This paper analyzes the implications of the behavior observed in the Babb and Bohl gaming experiments for future performance and organization. The objectives are to project which types of organizations are most likely to survive and grow in various competitive environments and to explore the implications of projected performance measures for firms in the industry and for farmers. The focus of this research is on the economic consequences of pricing decisions made by subjects in the gaming experiments. The means and standard deviations of price decisions made by managers from different types of organizations and under different competitive environments imposed in the Babb and Bohl experiments are the basic inputs for the simulator used in this research. The simulator provides longer run implications of repeated price decisions observed in the gaming experiment.

A Total Marketing System for U.S. Dairy Cooperatives

Three models were developed as management planning tools to test various policies employed by dairy cooperatives to implement a centralized production and marketing program. Effects of various pooling plans on distribution of returns to producers and on regional milk production are demonstrated.