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Duration in Production Contracts

Author

Listed:
  • MacDonald, James M.
  • Korb, Penelope J.

Abstract

We use 2003 and 2004 ARMS data to analyze variations in contract duration among growers of broilers who hold production contracts. Most contracts cover just a single flock, but many extend for 1-2 years, and a significant minority of broiler contracts specify lengths of 5, 10, and even 15 years. We find that grower debt and production volume are inversely related to the choice of a short term (a year or less) contract, while lengthy prior experience with the contractor promotes short term contracts. Some contract terms appear to act as substitutes or complements to duration.

Suggested Citation

  • MacDonald, James M. & Korb, Penelope J., 2006. "Duration in Production Contracts," 2006 Annual meeting, July 23-26, Long Beach, CA 21112, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21112
    DOI: 10.22004/ag.econ.21112
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    References listed on IDEAS

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