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| Bailey, Michael D.; Sporleder, Thomas L.. |
| Farmers continue to be interested in opportunities for value added production through further processing. New Generation Cooperatives (NGCs) offer member commitment through up-front capital contributions on the part of members. For a potential start-up NGC, one of new and novel issues that face the management of an NGC is making project commitments against the total capital available, both equity and debt capital. Because of the up-front capital commitment by members, NGCs invite managers to make commitments in phases, rather than one initial go or no-go decision. Thus, the capital decision is complex and requires managerial vision in terms of an uncertain world beset by constant shifts in prices, interest rates, consumer tastes, and technology. This paper... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Risk and Uncertainty; Agribusiness. |
| Ano: 2000 |
URL: http://purl.umn.edu/31807 |
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| Sporleder, Thomas L.; Bailey, Michael D.. |
| New Generation Cooperatives have emerged as a contemporary means for farmers to invest in further processing activities. This paper considers real options as the basis for evaluating producer investment in a start-up cooperative that involves technological uncertainty. The investment and risk inherent in producer membership in an NGC is analyzed using real options theory logic. Real options theory has recently been extended to technology positioning projects and how the extent of uncertainty influences the value of a technology "option". Conventional net present value formulas have been shown to be limited when the conditions of the investment require substantial commitment under uncertainty, such as investments in technology. Implications for... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Agribusiness. |
| Ano: 2001 |
URL: http://purl.umn.edu/20725 |
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