Cooperatives and Contracting in Agriculture: The Case of West Liberty Foods, October 2005

The West Liberty Foods turkey cooperative was formed in 1996 to purchase the assets and assume operations of Louis Rich Foods (an investor-owned processing rm), which, at the time, announced the imminent shutdown of its West Liberty, Iowa, processing facility. We study the creation and performance of this �new generation� cooperative using eld interviews with grower members and company management. We describe changes, before and after the buyout, in the contractual apparatus used for procuring live turkeys, and in the communication requirements, work expectations, and nancial positions of growers. During the private ownership period, most of the inputs (except labor and facilities) were provided by the rm; there was substantial supervision of the growers' actions; growers faced little price and production risk; and growers' equity was due largely to ownership of land and other farm assets. Our interviews reveal that, after cooperative formation, growers were exposed to considerable additional risk; monitoring of growers by the rm was less intensive; grower time and effort commitments to turkey production increased substantially; and a signicant fraction of rm (cooperative) equity came from growers' willingness to leverage their farm and personal assets (and hence indirectly their existing relationships with local lenders). We argue that some of these changes are consistent with a nancial contract where asset pledging and its corollary risk generate higher work effort by growers and a reduction in agency rents. These economies likely compensate for an organizational deadweight loss traditionally associated with cooperative governance.

Case Study of Seasonal Variation in the Subgrade and Subbase Layers of Highway US 20, TR-516, 2008

Seasonal variations in ground temperature and moisture content influence the load carrying capacity of pavement subgrade layers. To improve pavement performance, pavement design guidelines require knowledge of environmental factors and subgrade stiffness relationships. As part of this study, in-ground instrumentation was installed in the pavement foundation layers of a newly constructed section along US Highway 20 near Fort Dodge, Iowa, to monitor the seasonal variations in temperature, frost depth, groundwater levels, and moisture regime. Dynamic cone penetrometer (DCP), nuclear gauge, and Clegg hammer tests were performed at 64 test points in a 6-ft x 6-ft grid pattern to characterize the subgrade stiffness properties (i.e., resilient modulus) prior to paving. The purpose of this paper is to present the field instrumentation results and the observed changes in soil properties due to seasonal environmental effects.