Economic and financial analysis of large scale closed cooperative swine production under uncertainty in Iowa

This research evaluates the opportunities for small grain farmers in Iowa to organize a joint large scale swine production operation. Different business organizational structures\u27 legal and tax implications are examined for a joint large scale production operation. Based on the suitability from reviewing current the legal and tax regulations, the closed (defined membership) cooperative was selected as the organizational business structure for the proposed group of small grain farmers. The returns from establishing closed cooperatives owned by grain producers to produce hogs in Iowa are evaluate. Using a computer simulated production model incorporating both biological and price factors, the uncertainty of production and the market environment were modeled. Using a minimization of total absolute deviations (MOTAD) model, an efficient Expected Income-Mean Absolute Income Deviation (E-A) frontier is developed for the proposed closed swine production cooperatives