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Abstract

In this paper, we study how the boundary of hog producer organizations affects the economic performance of their members. From a French database providing economic and technical information on 886 hog farms, we estimate a system of equations including demand for input and output supply in order to evaluate marginal costs and margins at farm level. We show that belonging to a cooperative that develops financial links upstream and downstream allows farmers to reach, on average, lower marginal costs higher margins. In addition, even if the marketing cooperatives or bargaining associations allow their members to enjoy higher hog price than the average price, the farmers belonging to this type of producer organizations do not exhibit enough cost economies to reach large margins.

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