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Contract and Exit Decisions in Finisher Hog Production AgEcon
Dong, Fengxia; Hennessy, David A.; Jensen, Helen H..
Finisher hog production in North America has seen a shift toward larger production units and contract-organized production since circa 1990. Given the efficiency gains and conversion costs associated with contract production, growers may have to choose between long term commitment through investments and atrophy with intent to exit in the intermediate term. A model is developed to show that growers with any of three efficiency attributes (lower innate hazard of exit, variable costs, or fixed contract adoption costs) are not only more likely to contract but will also produce more and expend more on lowering business survival risks. Using the 2004 U.S. Agricultural Resource Management Survey for hogs, a recursive bivariate probit model is estimated in which...
Tipo: Conference Paper or Presentation Palavras-chave: Agricultural industrialization; Hog production; Occupation choice; Production contracts; Recursive bivariate probit; Relationship-specific investments; Sector dynamics.; Agricultural and Food Policy; Demand and Price Analysis; Production Economics; D23; Q12; J26; J43..
Ano: 2009 URL: http://purl.umn.edu/49343
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Contract and Exit Decisions in Finisher Hog Production AgEcon
Dong, Fengxia; Hennessy, David A.; Jensen, Helen H..
Finisher hog production in North America has seen a shift toward larger production units and contract-organized production since around 1990. Given the efficiency gains and conversion costs associated with contract production, growers may have to choose between long-term commitment through investments and atrophy with intent to exit in the intermediate term. A model is developed to show that growers with any of three efficiency attributes (lower innate hazard of exit, variable costs, or fixed contract adoption costs) are not only more likely to contract but will also produce more and expend more on lowering business survival risks. Using the 2004 U.S. Agricultural Resource Management Survey for hogs, a recursive bivariate probit model is estimated in which...
Tipo: Working or Discussion Paper Palavras-chave: Agricultural industrialization; Hog production; Occupation choice; Production contracts; Recursive bivariate probit; Relationship-specific investments; Sector dynamics..
Ano: 2008 URL: http://purl.umn.edu/37331
Registros recuperados: 2
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