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Industrialization and Contracting in U.S. Agriculture

Author

Listed:
  • Ahearn, Mary Clare
  • Korb, Penelope J.
  • Banker, David E.

Abstract

This paper examines the industrialization process of U.S. agriculture by examining the trends in the number of farms, the concentration of production during the last decade, and the dynamics of farm survivability, entry, and exit underlying aggregate statistics. We next examine vertical coordination as part of the industrialization process and highlight contracting in the poultry industry. The analysis provides evidence that production is continuing to be concentrated on a smaller number of farms at a relatively rapid rate, in spite of the stability in the number of farms. Although contracting clearly dominates the broiler industry, it is less prevalent in egg and turkey production, where other forms of vertical coordination are likely established.

Suggested Citation

  • Ahearn, Mary Clare & Korb, Penelope J. & Banker, David E., 2005. "Industrialization and Contracting in U.S. Agriculture," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(02), August.
  • Handle: RePEc:ags:joaaec:43511
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    File URL: http://purl.umn.edu/43511
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    References listed on IDEAS

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    1. Michael Boehlje, 1999. "Structural Changes in the Agricultural Industries: How Do We Measure, Analyze and Understand Them?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1028-1041.
    2. McBride, William D. & Key, Nigel D., 2003. "Economic And Structural Relationships In U.S. Hog Production," Agricultural Economics Reports 33971, United States Department of Agriculture, Economic Research Service.
    3. Perry, Janet E. & Banker, David E. & Green, Robert C., 1999. "Broiler Farms' Organization, Management, and Performance," Agricultural Information Bulletins 33739, United States Department of Agriculture, Economic Research Service.
    4. Johnson, James D. & Perry, Janet E. & Korb, Penelope J. & Sommer, Judith E. & Ryan, James T. & Green, Robert C. & Durst, Ron L. & Monke, James D., 2001. "Structural and Financial Characteristics of U.S. Farms: 2001 Family Farm Report," Agricultural Information Bulletins 33707, United States Department of Agriculture, Economic Research Service.
    5. Allen, Douglas W & Lueck, Dean, 1995. "Risk Preferences and the Economics of Contracts," American Economic Review, American Economic Association, vol. 85(2), pages 447-451, May.
    6. Drabenstott, Mark, 1995. "Agricultural Industrialization: Implications for Economic Development and Public Policy," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(01), pages 13-20, July.
    7. Drabenstott, Mark, 1995. "Agricultural Industrialization: Implications For Economic Development And Public Policy," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(01), July.
    8. Azzeddine Azzam, 1998. "Captive Supplies, Market Conduct, and the Open-Market Price," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 76-83.
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    Citations

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    Cited by:

    1. Katchova, Ani L., 2013. "Agricultural Contracting and Agrifood Competition," Staff Papers 164515, University of Kentucky, Department of Agricultural Economics.

    More about this item

    Keywords

    broilers; contracting; eggs; industrialization; poultry; structural change; turkeys; vertical integration; D23; D40; L11; L14 L22; L23; Q12;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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