Producer preferences towards vertical coordination: The case of Canadian beef alliances

Bodo Steiner, Kevin Lan, Jim Unterschultz, Peter Boxall, Emmanuel Laate and Danyi Yang

No 122441, 123rd Seminar, February 23-24, 2012, Dublin, Ireland from European Association of Agricultural Economists

Abstract: A survey among cow-calf producers was conducted during 2006 in Western Canada, to assess producers’ preferences towards participation in beef alliances. Producers’ choices were analyzed by varying the degree of vertical coordination in hypothetical lliance participation, while controlling for producer and farm-specific characteristics to explore risk, transaction cost and incentive considerations in participation decisions. Estimates from the attribute-based choice experiments suggest that information sharing regarding animal performance, revenue-risk and residual claimancy are important factors for producers driving alliance choices. Overall, cowcalf producers are willing to move toward higher levels of vertical coordination based on individual animal performance. However, the estimates also suggest that producers consider the benefits from being able to access animal-specific yield and grade data to be smaller than the costs of bearing potentially greater revenue risk as a result of moving towards grid-based pricing, and the transaction costs associated with relationship-building in alliances.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 35
Date: 2012-02-24
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa123:122441

DOI: 10.22004/ag.econ.122441

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