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Factors affecting choice of cash sales versus forward marketing contracts

Author

Listed:
  • Fraser McLeay

    (Department of Agricultural Economics and Food Marketing at Newcastle University)

  • Tony Zwart

    (Department of Economics and Marketing at Lincoln University)

Abstract

Although the use of various forms of marketing contracts is increasing within agricultural marketing channels, there has only been a limited number of research efforts that investigate the factors influencing the structure of agricultural marketing channels and individual firms selection decisions. This article examines issues relating to why alternative forms of sales transactions may predominate in different industries and how the marketing competencies of individual firms influence the type of contract selected by a business. The results of an empirical analysis of New Zealand farmers indicates that for an individual farmer sales transaction choice is influenced by marketing competencies and strategy, farm and farm manager characteristics, and the structural characteristics of the industry in which the transaction is taking place. © 1998 John Wiley & Sons, Inc.

Suggested Citation

  • Fraser McLeay & Tony Zwart, 1998. "Factors affecting choice of cash sales versus forward marketing contracts," Agribusiness, John Wiley & Sons, Ltd., vol. 14(4), pages 299-309.
    • Handle: RePEc:wly:agribz:v:14:y:1998:i:4:p:299-309
    DOI: 10.1002/(SICI)1520-6297(199807/08)14:4<299::AID-AGR4>3.0.CO;2-X
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    References listed on IDEAS

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    1. Alan Barkema & Mark Drabenstott, 1995. "The many paths of vertical coordination: Structural implications for the us food system," Agribusiness, John Wiley & Sons, Ltd., vol. 11(5), pages 483-492.
    2. Alan Barkema & Mark Drabenstott & Kelly Welch, 1991. "The quiet revolution in the U.S. food market," Economic Review, Federal Reserve Bank of Kansas City, vol. 76(May), pages 25-41.
    3. Randall E. Westgren, 1994. "Case Studies of Market Coordination in the Poultry Industries," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 42(4), pages 565-575, December.
    4. Jeffrey S. Royer, 1995. "Potential for cooperative involvement in vertical coordination and value-added activities," Agribusiness, John Wiley & Sons, Ltd., vol. 11(5), pages 473-481.
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    Cited by:

    1. Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Stanton, John & Hoque, Zohurul, 2007. "A Multi-Disciplinary Approach For Determining Adoption Of Agricultural Price Risk Management Strategies," 81st Annual Conference, April 2-4, 2007, Reading University, UK 7985, Agricultural Economics Society.
    2. Akhter Ali & Awudu Abdulai & Dil Bahadur Rahut, 2017. "Farmers' Access to Markets: The Case of Cotton in Pakistan," Asian Economic Journal, East Asian Economic Association, vol. 31(2), pages 211-232, June.
    3. Mofokeng, Maine & Vink, Nick, 2013. "Factors Affecting the Hedging Decision of Maize Farmers in Gauteng Province," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161465, African Association of Agricultural Economists (AAAE).
    4. Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Hoque, Zohurul & Stanton, John, 2006. "Selling raw wool by forward contract: A qualitative analysis of the pros and cons," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139793, Australian Agricultural and Resource Economics Society.
    5. Ueckermann, E.M. & Blignaut, J.N. & Gupta, Rangan & Raubenheimer, J., 2008. "Modelling South African grain farmers’ preferences to adopt derivative contracts using discrete choice models," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(2), pages 1-18, June.
    6. Corsi, Alessandro & Novelli, Silvia & Pettenati, Giacomo, 2014. "Alternative Food Networks in Piedmont: determinants of on-farm and off-farm direct sales by farmers," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173035, Italian Association of Agricultural and Applied Economics (AIEAA).
    7. Kariuki, Isaac Maina & Gideon, Aiko Obare & Loy, Jens-Peter, 2006. "Export Market Linkage via Gentleman's Agreement: Evidence from French Bean Marketing in Kenya," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25698, International Association of Agricultural Economists.
    8. Bensemann, Jessica & Shadbolt, Nicola, 2015. "Farmers’ Choice of Marketing Strategy: A Study of New Zealand Lamb Producers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(3), pages 1-33, September.
    9. Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Stanton, John, 2008. "A mixed-method approach for determining the risk and complexity farmers associate with using forward contracts," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 42305, Agricultural Economics Society.

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