Impact of diversification on agricultural cooperatives in Wisconsin

Abstract

Agricultural cooperatives often face internal and external pressures to diversify their businesses. Factors associated with a decision to diversify were examined in this study; results suggest that cooperatives that were larger and involved in input supply were more likely to diversify. In addition, the impact of diversification on key performance measures for the cooperatives was examined. Diversification had no statistical association with key performance areas (profitability, patronage refunds, or equity redemption). Diversification was associated with larger membership. On the basis of this study, diversification appears to have a neutral to modestly positive impact on cooperative performance. © 1996 John Wiley & Sons, Inc.