Contracting and Vertical Coordination in the United States Pork Industry PDF Download
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Author: Stephen W. Martinez Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This study examines the motivation behind contracts and vertical integration in the pork industry and simulates the effects of potential improvements in coordination. Incentives related to lowering costs of measuring and sorting hogs, and protecting against opportunistic behavior associated with specific assets, can result in hog quality improvements. A framework for simulating the effects of increased coordination through contracts and vertical integration was developed and used to evaluate potential improvements in leanness. Although simulations suggest only modest changes in pork prices and supplies, gains in consumers' surplus could be substantial for larger demand shifts due to quality improvements.
Author: United States. Congress. House. Committee on Agriculture. Subcommittee on Livestock, Dairy, and Poultry Publisher: ISBN: Category : Business & Economics Languages : en Pages : 132
Author: Jeffrey J. Reimer Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This article provides an economic explanation regarding why the share of U.S. pork raised on company-owned farms with hired management (integration) is increasing relative to production through independently owned-and-operated contract growers (contracting). The article develops a property rights model that shows how in certain circumstances production contracts do not transfer sufficient control over the use of production assets to intermediaries. On the other hand, integration removes certain grower incentives, with the result that production on company farms tends to be relatively costly. Practical examples of factors that influence the likelihood of full integration are emphasized.