Economies of Scale and Scope for Agricultural Supply and Marketing Cooperatives

Abstract

This study estimates scale and scope economies for a sample of multiproduct farm supply and grain marketing local cooperatives. A bootstrapping regression technique is used to estimate confidence intervals for the scale and scope elasticities. Strong support is found for firm-wide economies of scale. In addition, product-specific economies of scale are present for grain, petroleum, feed, and other merchandise sales, and to some extent fertilizer, but not for chemical sales. Scope economies are present for all six products.

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