Economic Feasibility of Establishing a Watermelon Packing Cooperative: A Case Study of Southwest Oklahoma

Increasing demand and import of watermelon in the United States presents an alternative to boost income for farmers facing declining prices of conventional crops. However, high costs associated with harvesting, post-harvest packing, storage, and marketing pose challenges to individual producers. Farmers’ cooperative (COOP) could help watermelon producers reduce post-harvest operational costs and expand direct marketing opportunities. This study analyzed the economic feasibility of establishing a watermelon packing COOP in southwest Oklahoma. Using the Packing Simulation Model (PACKSIM) and the Cooperative Feasibility Assessment Tool (CFAT), we simulated facility operation costs, revenues, and the COOP financial performance over a ten-year period. The analysis considers scenarios including various production scales, discount rates, market prices, and patronage distribution strategies. Results indicate that the economic viability of a watermelon packing COOP depends on production scale and COOP watermelon purchasing price. Larger-scale operations and lower purchasing prices could improve the likelihood of positive economic outcomes for the COOP and its members.