Dairy Farmers' Valuation of Cooperative Market Security

Cathy A. Hamlett, Brian Roach and Liebrand, Carolyn (edited By)

No 313030, Research Reports from United States Department of Agriculture, Rural Development

Abstract: This paper presents a methodology for quantifying the value of market security to an individual farmer. The income distribution associated with belonging to a cooperative is considered to have a lower variance than when selling to a proprietary handler. A farmer makes the choice between the cooperative and the proprietary handler based on individual risk preference. The amount a risk-averse farmer is willing to accept as compensation for facing a more risky distribution was calculated by employing Meyer’s technique for choosing between two stochastic functions. Several simulations were presented to demonstrate the magnitude and sensitivity of the measure.

Keywords: Agribusiness; Livestock Production/Industries; Marketing; Research Methods/Statistical Methods; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 18
Date: 1991-11
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Persistent link: https://EconPapers.repec.org/RePEc:ags:urdbrr:313030

DOI: 10.22004/ag.econ.313030

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