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The Effect of Risk and Autonomy on Independent Hog Producers' Contracting Decisions

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  • Gillespie, Jeffrey M.
  • Eidman, Vernon R.

Abstract

The introduction of vertical coordination in the hog industry has provided producers with new business arrangements for raising hogs. While some researchers have elicited utility functions for hog producers on the basis of income risk, none have addressed autonomy, a factor which appears to be important in business arrangement selection for independent family hog operations. In this study, a method is developed for eliciting a multi-attribute function with attributes of income and autonomy. Utility functions are elicited for a group of Minnesota farrow-to-finish hog producers. For these producers, autonomy dominated risk as the most important attribute in business arrangement selection.

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  • Gillespie, Jeffrey M. & Eidman, Vernon R., 1998. "The Effect of Risk and Autonomy on Independent Hog Producers' Contracting Decisions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 30(1), pages 175-188, July.
    • Handle: RePEc:cup:jagaec:v:30:y:1998:i:01:p:175-188_00
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    1. Davis, Christopher & Dimitri, Carolyn & Nehring, Richard & Collins, LaPorchia & Haley, Mildred & Ha, Kim & Gillespie, Jeffrey, 2022. "U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2022(Economic ), August.
    2. Davis, Christopher G. & Gillespie, Jeffrey M., 2004. "Attitudes and Characteristics of U.S. Hog Producers Under Alternative Business Arrangements," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2004, pages 1-6.
    3. Goodrich, Brittney K. & Goodhue, Rachael E., 2020. "Are All Colonies Created Equal? The Role of Honey Bee Colony Strength in Almond Pollination Contracts," Ecological Economics, Elsevier, vol. 177(C).
    4. Fraser, Iain, 2005. "Microeconometric analysis of wine grape supply contracts in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 1-24.
    5. Yang, Xi & Paulson, Nicholas D. & Khanna, Madhu, 2012. "Optimal Contracts to Induce Biomass Production under Risk," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124699, Agricultural and Applied Economics Association.
    6. Hudson, Darren, 2001. "Cross-Commodity Perspective On Contracting: Evidence From Mississippi," Research Reports 15800, Mississippi State University, Department of Agricultural Economics.
    7. Granoszewski, Karol & Spiller, Achim, 2013. "Langfristige Rohstoffsicherung in der Supply Chain Biogas: Status Quo und Potenziale vertraglicher Zusammenarbeit," DARE Discussion Papers 1303, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    8. Garcia, Philip & Nelson, Carl H., 2003. "Engaging Students In Research: The Use Of Structured Professional Dialogue," 2003 Annual meeting, July 27-30, Montreal, Canada 21894, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Key, Nigel D., 2002. "How Much Do Farmers Value Their Independence? Estimating The Risk And Autonomy Premia Associated With Production Contracts," 2002 Annual meeting, July 28-31, Long Beach, CA 19688, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Fausti, Scott W. & Gillespie, Jeffrey M., 2000. "A Comparative Analysis Of Risk Preference Elicitation Procedures Using Mail Survey Results," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36469, Western Agricultural Economics Association.
    11. Gillespie, Jeffrey M. & Davis, Christopher G. & Rahelizatovo, Noro C., 2004. "An Evaluation of U.S. Hog Producer Preferences Toward Autonomy," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(3), pages 1-16, December.
    12. Chris Boessen & Joe Parcell & Jason Franken & John Lawrence & Ron Plain & Glenn Grimes, 2010. "Producer perceptions and attitudes toward hog marketing contracts," Agribusiness, John Wiley & Sons, Ltd., vol. 26(3), pages 405-424.
    13. Adhikari, Bishwa B. & Harsh, Stephen B. & Cheney, Laura Martin, 2003. "Factors Affecting Regional Shifts Of U.S Pork Production," 2003 Annual meeting, July 27-30, Montreal, Canada 22200, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Granoszewski, K. & Spiller, A., 2014. "Vertragliche Zusammenarbeit bei der energetischen Biomasselieferung: Einstellungen und Bindungsbereitschaften von deutschen Landwirten," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 49, March.
    15. Ahn, Kyeong Ah & Choi, Young Chan, 2016. "Role of farmer’s attitude to risk in the relationship between trust and contract decisions: The fresh apple market in South Korea," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235762, Agricultural and Applied Economics Association.
    16. Christopher G. Davis & Jeffrey M. Gillespie, 2007. "Factors Affecting the Selection of Business Arrangements by U.S. Hog Farmers," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 331-348.
    17. Hudson Darren & Lusk Jayson, 2004. "Risk and Transactions Cost in Contracting: Results from a Choice-Based Experiment," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-19, February.
    18. Sauthoff, Saramena & Anastassiadis, Friederike & Mußhoff, Oliver, 2015. "Analyzing farmers' preferences for substrate supply contracts for sugar beets," DARE Discussion Papers 1509, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    19. Shang, Max Zongyuan & McEwan, Ken, 2017. "The Boundary of the Farm: Homegrown versus Purchased Feed on Ontario Swine Farms," Annual Meeting, 2017, June 18-21, Montreal, Canada 264191, Canadian Agricultural Economics Society.
    20. Key, Nigel D. & McBride, William D., 2001. "Does Contracting Raise Farm Productivity? The Impact Of Production Contracts On Hog Farm Performance," 2001 Annual meeting, August 5-8, Chicago, IL 20721, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    21. McBride, William D. & Key, Nigel D., 2001. "Factors Affecting Contractor And Grower Success In Hog Contracting," 2001 Annual meeting, August 5-8, Chicago, IL 20552, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    22. Cakir, Metin & Balagtas, Joseph Valdes & Wu, Steven Y., 2009. "Allocation of Authority in Agricultural Production Contracts," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49577, Agricultural and Applied Economics Association.

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