PRICE RISK MANAGEMENT IN HOG PRODUCTION THROUGH THE VERTICAL COORDINATION THEORETICAL AND PRACTICAL APPROACH

Alexandra Mironescu and Sebastian Stepien

Holistic Marketing Management Journal, 2012, vol. 2, issue 4, 19-25

Abstract: Vertical coordination is a form of price risk management which mitigates the negative effects of hog cycle, associated with price and supply fluctuations on the pig market and is aims to stabilize farm incomes. It can take the form of contracts or full vertical integration, however the level of farmers commitment results from the estimated production risk and ability to fulfill agreements provisions. The aim of this paper is to identify the nature and effects of price risk management in hog production through the vertical integration. The authors argue that the properly coordinated production process can reduce the risk of price and production volatility and helps to stabilize farms income. It may also be beneficial to the environment and local community, strengthening the vitality of rural communities. It seems that this solution may become a dynamic trend in modern food system in developed countries.

Keywords: risk management; price fluctuations; vertical integration (search for similar items in EconPapers)
JEL-codes: D23 Q12 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://holisticmarketingmanagement.ro/RePEc/hmm/v1i1/8/3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hmm:journl:v:2:y:2012:i:4:p:19-25

Access Statistics for this article

More articles in Holistic Marketing Management Journal from Holistic Marketing Management
Bibliographic data for series maintained by Theodor Valentin Purcarea ().