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An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans

Author

Listed:
  • Paulson, Nicholas D.
  • Katchova, Ani
  • Lence, Sergio H.

Abstract

Contracts serve as coordination mechanisms which allocate value, risk, and decision rightsacross buyers and sellers. The use of marketing contracts in agriculture, specifically for crop production,has been increasing over the past decade. This study investigates the determinants ofagricultural marketing contract design employing data from the USDA’s Agricultural ResourceManagement Survey. Models are estimated to analyze the association between producer and contractorcharacteristics, the decision to produce under contract, and the types of contract structuresobserved in practice, while controlling for the potential for endogenous matching betweencontracting parties. Results indicate that while certain producer characteristics are significantlyassociated with the decision to produce corn or soybeans under contract, there is no significantassociation between those characteristics and specific contract attributes.

Suggested Citation

  • Paulson, Nicholas D. & Katchova, Ani & Lence, Sergio H., 2010. "An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans," Staff General Research Papers Archive 31525, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:31525
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Vassalos, Michael & Li, Yingbo, 2014. "Assessing the Impact of Fresh Vegetable Growers’ Risk Aversion Levels and Risk Perception on the Probability of Adopting Marketing Contracts: A Bayesian Approach," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170233, Agricultural and Applied Economics Association.
    2. Anastassiadis Friederike & Feil Jan-Henning & Musshoff Oliver & Schilling Philipp, 2014. "Analysing Farmers’ Use of Price Hedging Instruments: An Experimental Approach," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 1-12, January.
    3. Wanglin Ma & Awudu Abdulai, 2016. "Linking apple farmers to markets: Determinants and impacts of marketing contracts in China," China Agricultural Economic Review, Emerald Group Publishing, vol. 8(1), pages 2-21, February.
    4. Jensen, Kimberly L. & English, Burton C. & Clark, Christopher D. & Menard, R. Jamey, 2011. "Preferences for Marketing Arrangements by Potential Switchgrass Growers," Journal of Cooperatives, NCERA-210, vol. 25.
    5. Vassalos, Michael & Li, Yingbo, 2016. "Assessing the Impact of Fresh Vegetable Growers’ Risk Aversion Levels and Risk Preferences on the Probability of Adopting Marketing Contracts: A Bayesian Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 19(1).
    6. Yang, Xi & Miao, Ruiqing & Khanna, Madhu, 2014. "Contracting in the Presence of Insurance: The Case of Bioenergy Crop Production," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170188, Agricultural and Applied Economics Association.
    7. Frasa, Stefanie & Carlberg, Jared & Hogan, Robert, 2015. "Use of Contracts by Prairie Agricultural Producers," Working Papers 232328, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    8. Katchova, Ani L., 2013. "Agricultural Contracting and Agrifood Competition," Staff Papers 164515, University of Kentucky, Department of Agricultural Economics.

    More about this item

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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