Managing uncertainty and expectations: The strategic response of U.S. agricultural cooperatives to agricultural industrialization

The 20th century industrialization of agriculture confronted U.S. agricultural cooperatives with responding to an event they neither initiated nor drove. Agrarian-influenced cooperatives used two metaphors, "serfdom'' and "cooperatives are like a family'' to manage uncertainty and influence producer expectations by predicting industrialization's eventual outcome and cooperatives' producer driven compensation. The serfdom metaphor alluded to industrialization's potential to either bypass family farmers, the cornerstone of the economy according to agrarian ideology, or to transform them into the equivalent of piece-wage labor as contract growers. The "family'' metaphor reflects how cooperatives personalized the connection between cooperative and farmer-member to position themselves as the exact opposite of serfdom. Hypotheses advanced by Roessl (2005) and Goel (2013) suggest that intrinsic characteristics of family businesses such as a resistance to change and operating according to a myth of unlimited choice and independence reinforced the risk of institutional lock-in posed by agrarian ideology. To determine whether lock-in occurred, Woerdman's (2004) neo-institutional model of lock-in was examined in the context of late 20th century cooperative grain and livestock marketing. Increasingly ineffective open markets prompted three regional cooperatives to develop their own models of industrialized pork production. Direct experience with producer contracting allowed cooperatives to evade institutional and ideological lock-in. Published by Elsevier Ltd.