@article{Miller:202898,
      recid = {202898},
      author = {Miller, Katherine S. and Raikes, Ronald},
      title = {A Risk Processing Analysis of Cattle Procurement by Beef  Packers},
      address = {1978-05},
      number = {1803-2016-142575},
      pages = {15},
      year = {1978},
      abstract = {Shifts in the relative importance of alternative  coordination arrangements among agricultural producers and  processors, and particularly shifts from spot market  transactions to forward contracts or vertical integration,  may have substantial impacts on the control of agricultural  production and thus may be the target of policy actions.  One approach to the problem of identifying trends under way  in the relative importance of alternative arrangements is  to focus on producer and processor choices among marketing  and procurement alternatives.In the study reported in this  paper, the cattle-procurement decision problem faced by a  beef packer was formulated by using a multi-period,  parametric quadratic-programming model. Five alternative  arrangements for procuring fed cattle were included in the  model: spot purchases, purchases through forward contracts  with hedging,purchases through forward contracts without  hedging,custom feeding, and packer feeding. Gross margins  for procurement alternatives were found to be  auto-correlated, and this was taken into account in  computing variances of the present values of returns. A  major conclusion is that , given the dominance of spot  transactions in sales of beef carcasses and by-products, a  trend away form reliance on spot purchases of fed cattle  and toward vertical integration is not likely. especially  for risk-averse packers.},
      url = {http://ageconsearch.umn.edu/record/202898},
      doi = {https://doi.org/10.22004/ag.econ.202898},
}