As a result of economies of size, food processors are generally large and few in number. These
characteristics put processors at a bargaining advantage over independent farmers. Marketing
cooperatives were established to counter the uneven bargaining position of individual farmers.
This article investigates the relative bargaining strength of one milk marketing cooperative and
several fluid milk processors. The Nash bargaining model can be used to analyze the negotiated
price in the Florida fluid milk market which acts like a bilateral monopoly. The milk
marketing cooperatives have bargained well with the milk marketing processors. The monthly
bargaining strength of the Southeast Dairy Cooperative, Inc. (SDC), exceeds the monthly bargaining
strength of the processors in all twelve months, ranging from a low of 0.6664 in January
to a high of 0.7831 in September. The monthly average bargaining strength across all
months for SDC is 0.7326