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Producer preferences towards vertical coordination: The case of Canadian beef alliances


  • Steiner, Bodo E.
  • Lan, Kevin
  • Unterschultz, James R.
  • Boxall, Peter C.
  • Laate, Emmanuel
  • Yang, Danyi


A survey among cow-calf producers was conducted during 2006 in Western Canada, to assess producers’ preferences towards participation in beef alliances. Producers’ choices were analyzed by varying the degree of vertical coordination in hypothetical lliance participation, while controlling for producer and farm-specific characteristics to explore risk, transaction cost and incentive considerations in participation decisions. Estimates from the attribute-based choice experiments suggest that information sharing regarding animal performance, revenue-risk and residual claimancy are important factors for producers driving alliance choices. Overall, cowcalf producers are willing to move toward higher levels of vertical coordination based on individual animal performance. However, the estimates also suggest that producers consider the benefits from being able to access animal-specific yield and grade data to be smaller than the costs of bearing potentially greater revenue risk as a result of moving towards grid-based pricing, and the transaction costs associated with relationship-building in alliances.

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  • Steiner, Bodo E. & Lan, Kevin & Unterschultz, James R. & Boxall, Peter C. & Laate, Emmanuel & Yang, Danyi, 2012. "Producer preferences towards vertical coordination: The case of Canadian beef alliances," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122441, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa123:122441

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    References listed on IDEAS

    1. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, April.
    2. Dinar, Ariel & Yaron, Dan, 1990. "Influence Of Quality And Scarcity Of Inputs On The Adoption Of Modern Irrigation Technologies," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(02), December.
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    4. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    5. Bodo E. Steiner, 2007. "Negotiated transfer pricing: Theory and implications for value chains in agribusiness," Agribusiness, John Wiley & Sons, Ltd., vol. 23(2), pages 279-292.
    6. Jeffrey H. Dorfman, 1996. "Modeling Multiple Adoption Decisions in a Joint Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 547-557.
    7. Raper, Kellie Curry & Black, J. Roy & Hilker, James H., 2008. "Perceptions of Vertical Marketing Arrangement Performance: Cow/calf Producers versus Multiple Production Level Producers," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6415, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    12. Unterschultz, James R. & Gurung, Rajendra Kumar, 2002. "New Generation Co-Operatives (Ngc) As A Model For Value-Added Agricultural Processing In Alberta: Applications To Factors Affecting Choice Of Pricing And Payment Practices By Traditional Marketing And," Project Report Series 24045, University of Alberta, Department of Resource Economics and Environmental Sociology.
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    More about this item


    beef value chain; vertical coordination; Canada; Risk and Uncertainty; Q12; Q13; C83; D22.;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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