Agricultural Contracts and Alternative Marketing Options: A Matching Analysis

The increasing use of agricultural contracts and processor concentration raises concerns that processors may offer lower contract prices in absence of competition from other local contractors and spot markets. This study examines the price competitiveness of marketing and production contracts depending on the availability of alternative marketing options. A propensity score matching method is used to compare prices using contract data from a farm-level national survey. The results show that the absence of other contractors or spot markets in producers’ areas does not lead to significant price differences in agricultural contracts for most commodities, providing evidence that most agricultural processors do not exercise market power by reducing prices when other local buyers are not available.


Issue Date:
2008
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/6336
PURL Identifier:
http://purl.umn.edu/6336
Total Pages:
25
Series Statement:
Selected Paper
462618




 Record created 2017-04-01, last modified 2018-01-22

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