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Food Processors’ Use of Contracts to Purchase Agricultural Inputs: Evidence from a Pennsylvania Survey

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Author Info
Jaenicke, Edward C.
Shields, Martin
Kelsey, Timothy W.
Abstract

Using data from a survey of Pennsylvania food processors, we investigate what firm-level characteristics make a processor more or less likely to buy agricultural inputs and ingredients though contracts. We find that over 20 percent of Pennsylvania processors use contracts, and over 44 percent of agricultural inputs (based on value) are purchased under contract. We also analyze the two related questions of what firm attributes, attitudes, or other factors make a firm more likely to use contracts at all, and what factors lead a processor who does contract to use them more intensively.

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File URL: http://purl.umn.edu/44698
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Publisher Info
Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 36 (2007)
Issue (Month): 2 (October)
Pages:
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Handle: RePEc:ags:arerjl:44698

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Related research
Keywords: contracting; food processors; logit; sample selection; Agribusiness; Agricultural Finance;

References listed on IDEAS
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  1. MacDonald, James M. & Korb, Penni, 2006. "Agricultural Contracting Update: Contracts in 2003," Economic Information Bulletin 33903, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  2. Handy, Charles R. & Thompson, Gary D. & Glaser, Lewrene K., 2001. "Recent Changes In Marketing And Trade Practices In The U.S. Lettuce And Fresh-Cut Vegetable Industries," Agricultural Information Bulletins 33601, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  3. MacDonald, James & Perry, Janet & Ahearn, Mary & Banker, David & Chambers, William & Dimitri, Carolyn & Key, Nigel & Nelson, Kenneth & Southard, Leland, 2004. "Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities," Agricultural Economics Reports 34013, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  4. Katz, Michael L., 1989. "Vertical contractual relations," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 11, pages 655-721 Elsevier. [Downloadable!] (restricted)
  5. Martin, Laura L., 1997. "Production Contracts, Risk Shifting, And Relative Performance Payments In The Pork Industry," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(02), December. [Downloadable!]
  6. Holmstrom, Bengt R. & Tirole, Jean, 1989. "The theory of the firm," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 2, pages 61-133 Elsevier. [Downloadable!] (restricted)
  7. Hueth, Brent & Melkonyan, Tigran, 2005. "Quality Measurement and Contract Design: Evidence from the North American Sugar Beet Industry," Staff General Research Papers 12350, Iowa State University, Department of Economics.
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This page was last updated on 2009-12-11.


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