Price Stability and Economic Sustainability–Achievable Goals? A Case Study of Organic Valley®

17 Pages Posted: 15 Apr 2020

See all articles by Ye Su

Ye Su

University of Missouri at Columbia

Michael L. Cook

University of Missouri at Columbia - Agricultural and Applied Economics

Date Written: March 2015

Abstract

Organic Valley is the largest organic cooperative in North America, one of two national buyers of organic milk, and one of two national organic dairy manufacturers. The cooperative's official name is Cooperative of Regional Organic Producers, and it is organized as a new generation cooperative, owned and controlled by patron‐members who also transact with the business. Organic Valley has a unique policy of sustainable and stable producer pay‐pricing for organic milk in the emerging organic dairy industry. This case presents challenges faced by the leadership of Organic Valley cooperative to maintain a stable and economically sustainable pay price for its farmer members. This case also introduces students to a new organizational form of cooperative, including its governance, the industry, and the market structure in which the cooperative operates. The objective of this case study is to improve student understanding of economic concepts such as theories of the imperfect market, demand and supply, and organizational design. The case also aims to help students improve their critical thinking and analytical skills by exploring the possibility of maintaining a unique sustainable and stable pricing method through the data provided. Additionally, the story introduces the economic role that organic dairy operation might play for small and medium‐size dairy farmers as they attempt to maintain an economically sustainable family farm lifestyle.

Keywords: Demand and supply, economic sustainability, industry organization, stable price

Suggested Citation

Su, Ye and Cook, Michael L., Price Stability and Economic Sustainability–Achievable Goals? A Case Study of Organic Valley® (March 2015). American Journal of Agricultural Economics, Vol. 97, Issue 2, pp. 635-651, 2015, Available at SSRN: https://ssrn.com/abstract=3574859 or http://dx.doi.org/10.1093/ajae/aau114

Ye Su

University of Missouri at Columbia

332 Cornell Hall
Columbia, MO Columbia 65211
United States

Michael L. Cook (Contact Author)

University of Missouri at Columbia - Agricultural and Applied Economics ( email )

Columbia, MO 65211
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3
Abstract Views
165
PlumX Metrics