Does the Prevalence of Contract Hog Production Influence the Price Received by Independent Hog Producers?
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Nigel Key
The increasing use of production contracts in the hog sector has reduced the number of spot market transactions and raised concerns about price manipulation by packers. These concerns have helped spur legislative efforts to restrict packer ownership of livestock and to regulate livestock contracts. Using panel data from the 2002 and 2007 Census of Agriculture, this study looks for evidence that production contracts are associated with market manipulation by examining whether the local prevalence of production contracts affects the price of finished hogs received by independent producers. The empirical approach examines whether changes in the prevalence of contracting at the county level are correlated with changes in the spot market price received by individual farmers. By comparing differences over time, this approach controls for unobservable time-invariant individual and county characteristics—such as product quality and location—that might be correlated with price and contracting prevalence. Results are sufficiently precise to rule out an economically significant negative relationship between contracting prevalence and the spot price as statistically unlikely.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- Tax Incidence When Quality Matters: Evidence from the Beer Market
- Market Efficiency in the Non-Genetically Modified Soybean Futures Market
- Do Taxes Produce Better Wine?
- Economic Effects of Purity Standards in Biotech Labeling Laws
- Does the Prevalence of Contract Hog Production Influence the Price Received by Independent Hog Producers?
- Impact of Country-of-Origin Labeling on Bovine Meat Trade
- Geographical Indications and The Trade Related Intellectual Property Rights Agreement (TRIPS): A Case Study of Basmati Rice Exports
- Measuring Consumers' Attachment to Geographical Indications
- Willingness to Pay for Fair Trade Coffee: A Conjoint Analysis Experiment with Italian Consumers
- Pressure Group Competition and GMO Regulations in Sub-Saharan Africa - Insights from the Becker Model
- Price Transmission and Volatility in the Greek Broiler Sector: A Threshold Cointegration Analysis
- Livestock Mandatory Price Reporting: A Literature Review and Synthesis of Related Market Information Research
