Designing coordination contracts to support efficient flow-scheduling in pork chain

Jarkko K. Niemi

No 125208, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: Risk management and efficient, well coordinated, flow-scheduling have an increasingly important role in the competitive pork production networks. Changes in input and output prices have resulted in distortions in the Finnish pig markets during the last years. The goal of this study is to estimate how different price or quantity-fixing contracts affect the values of pig and sow space unit under price risk. The values are estimated with two stochastic dynamic programming models. The results suggest that a contract which is able to control both the pattern of changes in piglet prices and the option to suspend production temporarily has a value and it can help to improve the competitiveness of the pig sector. However, it is feasible to have incentives towards the contract commitment when market situation upon accepting the commitment is favourable.

Keywords: Agribusiness; Farm Management; Livestock Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 28
Date: 2012-06
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:125208

DOI: 10.22004/ag.econ.125208

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