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Abstract
Using farm-level panel data from the U.S. Census of Agriculture, this research examines
whether hog producers with production contracts increased output more, or were more likely
to survive in business over 5 years, compared with independent producers. Additionally, this
research examines whether independent producers who adopted a production contract grew
more than similar independent operations who did not contract. The local availability of
contracts serves as an instrumental variable to address the potential endogeneity of the
contracting decision. Results indicate that the use and adoption of production contracts affect
farm size growth and survival differently depending on the initial size of an operation.