Why do cooperatives continue to emerge given the strong economic disincentives that exist? And why is it that in some communities they are collocated with their commercial counterparts and in others territorial partitioning occurs? In this paper, we develop a community ecology approach that integrates economic and sociological accounts of cooperatives, in an attempt to reconcile these contradictory observations. Using a detailed panel data set for the county-level founding process of cooperatives in the U.S. ethanol industry from 1978 to June 2013, consistent with economic arguments, we find that the founding rate of cooperatives decreases in the presence of high local corporate ethanol production capacity. However, this negative competitive interdependence is attenuated in local communities where: 1) corporations represent a potential threat to the autonomy of local farmers, 2) there is a generally anti-corporate climate, and 3) there is a well-established organizational infrastructure supporting a cooperative ideology. Consistent with sociological theories that emphasize the mobilizing force of ideology, these local conditions spur collective action among farmers to establish cooperatives in response to the local diffusion of corporations. We show further that the diffusion of plants owned by big business (oil and agribusiness) in communities characterized by a general anti-corporate climate, especially promotes greater ideological contestation, and mobilization of resources to form cooperatives.