Quality Differences and Risk Shifting Associated with Alternative Marketing Arrangements in the Swine Industry

We analyze quality differences in market hogs across alternative procurement methods. The test results show that alternative marketing (procurement) channels generate hogs of statistically different quality. However, the quality ordering of alternative marketing arrangements is not unique, but varies across quality attributes, and the quality differences do not appear to be economically significant. We examine the relationship between alternative procurement methods for live hogs and the quality of the resulting pork products. The correlation coefficient between the non-spot market purchases of live hogs and the Hicks’ composite quality index for pork products is positive and significant, but the magnitude of that effect is small. Finally, we show that different types of marketing arrangements exhibit different price volatilities, subjecting the producers selling their hogs through these channels to different levels of risk.


Issue Date:
2008-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/55977
Published in:
Journal of Food Distribution Research, Volume 39, Number 2
Page range:
77-91
Total Pages:
15




 Record created 2017-04-01, last modified 2017-04-04

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