Financial Structure of Corn -Belt Cow -Calf Enterprises: The Impact of Alliance Participation on Producer Financial Position

Abstract

This study looks at how participation in an alliance affects the financial position of Corn-belt Cow-Calf producers. The study finds the risk-return theory to be intact as income variability rises with the added expected returns of alliance participation. Additionally, the results suggest that the improved expected return has a strong impact on improving financial ratios due to the low return nature of the beef industry. However, producers must be cautioned that choosing an alliance is very crucial to this success. If the alliance chosen does not match with the producer's herd, then the producer would likely be better off in the traditional open market.